Nigeria’s public debt recently rose to N44.6 trillion in the third quarter (Q3) of 2022, due to recent borrowings.
Amid the growing concerns that Nigeria might be approaching a debt trap, the Debt Management Office (DMO) in a statement, revealed that the recent increase in the nation’s public debt was due to new borrowings by the government to part finance the deficit in the 2022 Appropriation Act, as well as new borrowings by sub-nationals.
The statement reads, “Total public debt stock which comprises the total domestic and external debt stock of the federal government of Nigeria (FGN), all State Governments and the Federal Capital Territory (FCT) stood at N44.06 trillion.
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“In comparison, the total public debt figure as of June 30, 2022, was N42.84 trillion. The total domestic stock as of September 30, 2022, was N26.92 trillion while the total external debt stock as of September 30, 2022, was N17.15 trillion.
“The increase in the Debt Stock was largely due to New Borrowings by the Federal Government to part-finance the deficit in the 2022 Appropriation Act, as well as, New Borrowings by sub-nationals.”
Also, data from the DMO’s external and domestic debt service revealed that Nigeria spent N1.17 trillion on debt in the third quarter (Q3) of 2022.
Nigeria’s latest debt of N44.06 trillion represents a 2.9 percent quarter-on-quarter increase when compared to N42.84 trillion recorded in Q2 in 2022.
Reports reveal that Nigeria’s public debt has risen the most under President Buhari’s administration when compared to other administrations since 1999.
The government keeps borrowing to meet its debt financing obligations, a development many economists describe as disturbing and unsustainable.
Meanwhile, in 2021, the DMO justified President Muhammadu’s continuous borrowing, noting that it has been instrumental in helping Nigeria bounce back from the recession caused by economic shocks which put a strain on the country’s revenue.
Analysts in the financial sector projected that the continuous borrowings by the federal government in 2022, were due to low oil outputs resulting in a decline in oil revenue which was affected by incessant oil theft.
However, in a 2021 report, the World Bank placed Nigeria among the top 10 countries in the world with the highest debt risk exposure.
The world bank therefore, cautioned Nigeria against excessive debts, urging a balance between massive spending for development on one hand and moderation in borrowing on the other hand.
Due to the country’s incessant borrowings, last year, some prominent statesmen and leaders warned the international community against lending to the Nigerian Government, stating that Nigeria is a country with questionable sovereignty.