The total domestic debt outstanding of Nigeria at the end of June 2020 stood at ₦15,455.70 billion, representing an increase of ₦2,042.90 billion or 15.23 per cent.
According to the report, the rise was mainly from Federal Government of Nigeria (FGN) Bonds, Nigerian Treasury Bills (NTBs) and Federal Government of Nigeria (FGN) Promissory Notes.
The main elements of the debt stock are FGN Bonds ₦11,241.30 billion (72.73 per cent) and NTBs ₦2,760.44 billion (17.86 per cent).
Others are FGN Promissory Notes ₦951.74 billion (6.16 per cent), FGN Sukuk ₦362.56 billion (2.35 per cent), FGN Treasury Bonds ₦100.99 billion (0.65 per cent), FGN Green Bonds ₦25.69 billion (0.17 per cent) and FGN Savings Bonds ₦12.98 billion (0.08 per cent).
Similarly, the cost of debt service also increased by 12.20 per cent to ₦898.39 billion at the end of June 2020, compared to ₦800.73 billion in the corresponding period of 2019 owing to the increase in borrowing by the Federal Government during the review period.
The Nigerian economy faced severe challenges in the first half of 2020 amidst global health and economic crises. The enforcement of a nation-wide lockdown led to apartial shutdown of economic activities.
Consequently, GDP growth rates stood at 1.87 and -6.10 per cent in the first and second quarters of 2020, respectively, representing a decline of 0.23 and 8.22 percentage points below 2.10 and 2.12 per cent recorded in 2019, respectively.
Nigeria’s oil sector recorded declines of -5.00 and -6.63 per cent in the first and second quarters of 2020; while the non-oil sector contracted by -1.55 and -6.05 per cent in the first and second quarters of 2020, respectively.
This was due to the COVID-19 pandemic, low global demand for crude oil, supply glut in the international oil market and foreign portfolio capital reversals, a development with adverse consequences for the external reserves.
The Manufacturing and non-Manufacturing Purchasing Manager’s Indices (PMIs) declined considerably to 41.10 and 35.70 index points, respectively, at end-June 2020, compared with 57.40 and 58.60 index points at end-June 2019.
Furthermore, the employment level index for the Manufacturing and non-Manufacturing PMIs contracted to 38.80 and 37.40index points, respectively, at end-June 2020, compared with 57.50 and 58.30 index points at end-June 2019.
The COVID-19-induced lockdown of the economy led to slower growth in production, new orders and employment level.
Headline inflation, year-on-year, was 12.56 per cent in June 2020, compared to 11.22 per cent in June 2019.
The sustained increase in inflationary pressures was credited to factors including the spill-over effects of the partial land border closure in the latter part of 2019 (to curb government revenue leakages and protect domestic production), reduced foreign inflows, disruptions in supply chain caused by COVID-19 restrictions on inter-state travels and the continued impact of deteriorating domestic infrastructure.