Knowing just external debt will not tell us much as it is only one side of the equation.
Here is an example from Norway (taken from
http://www.norges-bank.no/en/price-stability/government-debt/why-government-debt/):
Why government debt?
On the whole, the Norwegian government's net asset position is positive. This means that total assets exceed total debt. Government assets include deposits in Norges Bank, investments made by the Government Pension Fund Global, shares in domestic enterprises, lending and direct investment in state banks, state-owned enterprises and state limited companies. Government debt consists primarily of government bonds and Treasury bills.
In most countries, the government must issue government securities in domestic or foreign currency in order to have funds to repay existing debt which falls due and to finance government activities. Since the Norwegian government's net asset position is positive, the government could repay all government debt without raising new loans.
The Norwegian government nevertheless chooses to raise new loans by issuing Treasury bills or government bonds because:
The government must have a certain liquidity reserve in order to be able to cover daily payments. There are wide daily fluctuations in outgoing and incoming payments in government accounts, and it is difficult to calculate the size of these flows in advance. This is particularly the case for incoming tax payments. Adjustments in the government borrowing program can only partially smooth these fluctuations. The aim is therefore to ensure that the normal cash reserves do not fall below NOK 20-25 billion.
Government borrowing affects the banking system's total deposits in/borrowing from Norges Bank. The implementation of the government borrowing program may therefore be adjusted to some degree to Norges Bank's operations to manage liquidity in the banking system.
Another objective of government borrowing is to maintain and develop smoothly functioning and efficient financial markets in Norway. By issuing government bonds and Treasury bills, the government provides a risk-free yield curve for investments with a maturity of from about one month to about 10 years. Another important aspect of government securities is that they increase liquidity in the Norwegian capital market. Without the supply of government securities, the markets would be less efficient. Other loans and debt instruments are often priced in relation to government loans. Thus, government loans provide a good overview of the Norwegian securities market.
The objective of the government's debt management is to ensure that the government has adequate liquidity at the lowest possible cost. The government's interest income and overall exposures due to changes in interest rate levels must also be taken into account when evaluating borrowing costs.
And you ask where the money comes from? That depends on what country you are looking at.
For example the US's foreign creditors are mainly China and Japan, but the biggest part comes from the Fed itself where the debt is tied to intergovernmental holdings like social security (very bad idea IMO).
Other countries might have their dept from the world bank, other countries, bonds or private institutions. And don't forget how debt is treated in the banks themselves in terms of cash reserve ratio.
