APPRAISAL OF DOMESTIC DEBT INSTRUMENTS IN NIGERIA (2009-2018): EVIDENCE FROM DEBT MANAGEMENT OFFICE (DMO)

Abstract

This study appraised the instruments that contributed to the current level of domestic debt in Nigeria. The study employs secondary data sought from the annual reports of the Debt Management Office (DMO) from 2009-2018. Descriptive statistics like percentages, ratios, means, and standard deviation, among others were used to analyse data. The findings reveal an accelerated increase in domestic debt with Federal Government Bonds (FGBs), Nigerian Treasury Bills (NTBs), and Treasury Bonds (TBs), in that order, the most consistent instruments that contributed to its current level in Nigeria. The result also shows that FGBs and NTBs contributed between 61.18%- 73.07% and 24.70%-21.42% respectively to the level of domestic debts for the ten years reviewed. The finding also indicates that the Interest cost of domestic debt consistently moved upward with FGBs and NTBs contributing between 71.42%-62.08% and 14.30%-35.64% respectively. Thus, FGs and NTBs were the major domestic debt instruments that contributed to its rising profile. The study recommends among others for a review of the respective conditional agreement of the instruments of domestic debt for a more critical assessments of the contributory value to economic development, among others.