Nigeria’s public debt stock as of December 31, 2023, has reached a staggering N97.341 trillion (equivalent to 108.229 billion dollars), as revealed by data released by the Debt Management Office (DMO) in Abuja on Friday.
The DMO disclosed that this amount encompasses both domestic and external debt stocks of the federal government, the 36 state governments, and the Federal Capital Territory (FCT). Notably, there has been a significant increase of N9.43 trillion compared to the figures reported in the third quarter of 2023.
Explaining the surge, the DMO attributed it primarily to fresh domestic borrowing by the federal government aimed at financing the deficit in the 2024 budget, coupled with disbursements from multilateral and bilateral lenders.
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“Total domestic debt stood at N59.12 trillion, representing 61 percent of the total public debt stock, while external debt amounted to N38.22 trillion, constituting the remaining 39 percent,” stated the DMO.
Furthermore, the DMO highlighted that Nigeria’s external debt composition is skewed towards loans from multilateral and bilateral sources, aligning with the country’s debt management strategy. Multilateral loans accounted for 49.77 percent, and bilateral loans constituted 16.02 percent of the external debt stock.
“This equates to a total of 63.79 percent, primarily concessional and semi-concessional loans. While the DMO continues to implement best practices in public debt management, the recent and ongoing revenue enhancement efforts by the authorities will bolster debt sustainability,” The DMO said.
The rising debt profile is spurred by certain states’ disproportionately high levels of public debt. Lagos, Delta, and Ogun states stand out with the highest debt amounts, while Ebonyi, Kebbi, and Jigawa recorded the lowest debt stock.
With the public debt stock at N97.341 trillion, the individual debt burden borne by Nigerians is estimated at a debt stock per capita of N446,000. This is in consideration of Nigeria’s estimated population of 218 million people, according to World Bank Open Data.
Concerns have continued to grow about Nigeria’s rising debt portfolio, especially as it significantly gulps the nation’s revenue generation. The federal government said it plans to allocate a substantial N8.25 trillion for debt servicing in 2024. This amounts to approximately 45 percent of the projected revenue and 29 percent of the anticipated expenditure for the fiscal year, fuelling concerns over the sustainability of Nigeria’s debt trajectory.
The potential impacts of such high public debt on Nigeria’s economy are manifold; with economists warning that it can exert upward pressure on interest rates, crowd out private sector investment, and constrain government expenditure on critical sectors such as healthcare, education, and infrastructure. Furthermore, they note that excessive debt servicing obligations divert resources away from productive investments, hindering economic growth and development.
Against this backdrop, stakeholders are calling for prudent fiscal management and strategies to enhance revenue generation to mitigate the risk of debt distress. They note the urgent need for prudent fiscal management, enhanced revenue generation, and effective debt management strategies to mitigate the risks of debt distress and safeguard Nigeria’s economic future.
Many warn that failure to address these challenges could exacerbate vulnerabilities, undermine macroeconomic stability, and impede efforts to achieve sustainable development goals.