The oversubscribed sale in September was originally intended to raise $3bn. The current debt level is “highly unsustainable” on World Bank indicators, and will remain so in the absence of policy change, says Lukman Oyelani, an economist at the University of Lagos.
Borrowing in foreign currency in the context of a depreciating naira increases the risks, Lukman says. “The debt profile of Nigeria is a big risk for the country.” The only lifeline is that the country has more domestic than foreign debt, he says. According to Chapel Hill Denham, external borrowings currently account for 38.7% of total public debt.