Net foreign liability rises to $90.2bn, driven by OMO inflows

New CBN data revealed Nigeria’s net foreign liability position rose to $90.2 billion, driven by a $10.1 billion influx into high-yielding government debt instruments.

New financial data released by the Central Bank of Nigeria (CBN) revealed that the country’s net foreign liability position rose to $90.2 billion. External liabilities reached $215.8 billion against $125.6 billion in foreign assets, driven primarily by a $10.1 billion influx into high-yielding government debt instruments like OMO bills.

The rise in net foreign liability reflects the government’s increased borrowing from international markets. The influx into government debt instruments suggests that foreign investors are attracted to Nigeria’s high yields, but the rising liability position also increases the country’s exposure to external shocks.

This echoes the 2018 debt accumulation, which also saw Nigeria’s foreign liabilities rise. The mechanism then was different, but the result was the same: a growing debt burden.

The winners: the Nigerian government, which has access to foreign capital; and foreign investors, who earn high yields. The losers: the Nigerian public, who ultimately bear the cost of the debt; and the Nigerian economy, which faces increased vulnerability.

Bottom Line: Nigeria’s net foreign liability has risen to $90.2 billion. The debt is growing. The question is whether the borrowing will be used productively or wasted.