Sky-High Billions: Nigeria’s Towering N46.25 Trillion Debt Rockets To Dizzying Altitudes

EKO HOT BLOG reports that Nigeria’s public debt stock has rose to N46.25 trillion or $103.11 billion in the fourth quarter of 2022, according to the Debt Management Office (DMO).

The new figure is made up of the combined domestic and external debt stocks of the federal government and the sub-national governments, including the 36 state governments and the Federal Capital Territory.

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The DMO disclosed the latest figure in a statement on Thursday, noting that the comparative figure of public debt as of December 31, 2021, was N39.56 trillion or $95.77 billion. This means that the country’s debt increased by N6.69trn or $7.34bn within one year.

The DMO attributed the increase to new borrowings by the Federal Government and sub-national governments, primarily to fund budget deficits and execute projects, as well as the issuance of promissory notes to settle some liabilities.

The statement read in part, “As of December 31, 2022, the Total Public Debt Stock was N46.25 trillion or USD103.11 billion. In terms of composition, total Domestic Debt Stock was N27.55 trillion (USD 61.42 billion) while Total External Debt Stock was N18.70 trillion (USD 41.69 billion).

“Amongst the reasons for the increase in the total public debt stock were new borrowings by the FGN and sub-national governments, primarily to fund budget deficits and execute projects. The issuance of promissory notes by the FGN to settle some liabilities also contributed to the growth in the debt stock.

The DMO further explained that the debt figure under review was 23.20% of the Gross Domestic Product (GDP), indicating that it was well within the limits set by both the federal government and international organizations.

“The total public debt to gross domestic product (GDP) ratio for December 31, 2022, was 23.20 per cent and indicates a slight increase from the figure for December 31, 2022, at 22.47 per cent. The ratio of 23.20 per cent is within the 40 per cent limit self-imposed by Nigeria, the 55 per cent limit recommended by the World Bank/International Monetary Fund, and, the 70 per cent limit recommended by the Economic Community of West African States.”

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The DMO also stated that ongoing efforts by the government to increase revenues from oil and non-oil sources through initiatives such as the Finance Acts and the Strategic Revenue Mobilization initiative are expected to support debt sustainability.