DMO records first reduction since the CBN loan was converted into long-term government debt, as balance drops to N22.11tn…….
The Federal Government’s securitised Ways and Means debt fell by N613.34 billion in the second quarter of 2026, marking the first decline since the obligation was converted into part of Nigeria’s public debt stock three years ago.
Figures released by the Debt Management Office showed that the outstanding balance dropped from N22.719 trillion at the end of March to N22.106 trillion by June 30, 2026.
The latest figure represents a 2.70 per cent decline within the quarter and signals the beginning of principal repayments on the debt following the expiration of the three-year moratorium attached to its restructuring.
The securitised Ways and Means balance had remained unchanged at N22.719 trillion from June 2023, when it was formally incorporated into the Federal Government’s debt portfolio, through March 2026.
The debt was initially reflected within the broader FGN bond portfolio in DMO reports before subsequent publications began presenting it separately as “FGN Securitised Ways & Means.”
Despite the latest reduction, the obligation remains a significant component of the government’s domestic debt.
As of June, the N22.106 trillion balance represented 25.41 per cent of the Federal Government’s domestic debt and 34.09 per cent of its outstanding FGN bonds.
Total FGN bonds stood at N64.839 trillion at the end of the quarter. This comprised N41.468 trillion in naira-denominated bonds, N22.106 trillion in securitised Ways and Means debt and N1.265 trillion in domestic dollar-denominated bonds.
How The N22.7tn Debt Was Restructured
Ways and Means Advances are loans provided by the Central Bank of Nigeria to the Federal Government to bridge temporary funding gaps arising when government expenditure exceeds available revenue.
However, repeated reliance on the facility pushed government borrowing from the CBN significantly beyond the statutory threshold provided under the CBN Act.
In 2023, following approval from the President and the National Assembly, the Federal Government converted N22.719 trillion of outstanding Ways and Means advances into long-term securities issued to the CBN.
The transaction did not involve a fresh injection of funds. Instead, it transformed an existing short-term liability owed to the central bank into a formal long-term component of the Federal Government’s domestic debt.
The restructured obligation carries a 40-year tenor and attracts interest at nine per cent annually.
Under the arrangement, the government received a three-year moratorium on principal repayments, after which the outstanding amount would be amortised over the remaining 37 years.
The restructuring also lowered the interest cost compared with the previous arrangement, under which the advances attracted the Monetary Policy Rate plus three percentage points.
With the debt formally securitised, the obligation became part of Nigeria’s reported public debt stock.
Debt Reduction Does Not Lower Total Public Debt
Although the Ways and Means balance declined during the second quarter, the reduction did not translate into a fall in Nigeria’s overall public debt.
According to the DMO, Nigeria’s total public debt increased to N166.79 trillion as of June 30, 2026, from N159.35 trillion at the end of March.
Domestic obligations accounted for N91.59 trillion, representing 54.91 per cent of the total debt portfolio.
Measured in United States dollars, the country’s total public debt stood at approximately $120.93 billion, comprising $66.41 billion in domestic debt and $54.52 billion in external obligations.
The latest movement in the securitised Ways and Means balance therefore represents a shift in the composition and repayment profile of the government’s debt rather than an overall reduction in its outstanding liabilities.
The first quarterly decline since the 2023 securitisation comes as the Federal Government begins the principal repayment phase of the long-term arrangement with the CBN.
