Economic and Financial Review


S.C. Rapu


Central Bank of Nigeria


Domestic debt sustainability, External debt, Government expenditure, Domestic debt stock, Nigeria


This paper attempts to measure the sustainable domestic debt stock level of the Federal Government of Nigeria over a period of time. This is necessary, considering the growing proportion of the cost of domestic debt service in Federal Government total expenditure. The paper addresses definitional issues about domestic debt and domestic debt sustainability relative to national output as well as the necessary policy implications. It also examined the causes, size and growth, sources and structure. Using the budget constraint model relative to GDP, the paper concludes that under the current fiscal stance of primary deficit, the Federal Government domestic debt is not sustainable. In order to achieve sustainability of domestic debt, the paper emphasized the need for the Federal Government to achieve primary surpluses of not below 0.9 percent in the next five years, as well as improvement in the growth rate of the economy, fiscal reforms and a more efficient domestic debt management through domestic debt restructuring.

Author Bio

Mr. S. C. Rapu is an Assistant Director, Research Department, Central Bank of Nigeria, Abuja.

Publication Title

CBN Economic and Financial Review (EFR)





Recommended Citation

Rapu, S.C. (2003). Assessment of Nigeria's domestic debt sustainability. Economic and Financial Review, 42(2), 41-66.

Included in

Economics Commons



To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.