The Debt Management Office (DMO) has announced that Nigeria’s total public debt has risen to N121.67tn, representing a significant increase of N24.33tn or 24.99% within three months.
This surge is attributed to naira depreciation, new borrowing to finance the 2024 budget deficit, and the securitization of Ways and Means advances at the Central Bank of Nigeria.
As of March 31, 2024, the total public debt stood at N121.67tn ($91.46bn), compared to N97.34tn ($108.23bn) on December 31, 2023.
The total domestic debt increased to N65.65tn ($46.29bn), while the total external debt stood at N56.02tn ($42.12bn). The 36 states and the Federal Capital Territory (FCT) have an external debt of $3.1bn and a domestic debt of N4.068tn.
The naira depreciation significantly contributed to the increase, as the total debt reduced by $16.77bn or 18.34% in dollar terms. The DMO used an official exchange rate of N1,330/$ to convert external debts to naira, compared to N899.39 used in December 2023.
The rise in public debt has raised concerns about debt sustainability, with the government expecting improvements in revenue to enhance debt sustainability.
President Bola Tinubu has expressed commitment to breaking the cycle of overreliance on borrowing for public spending, stating that the country cannot continue to service its debt with 90% of its revenue.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has also emphasized the need to rely less on borrowing to stabilize the economy.
Financial experts, such as Bismarck Rewane, have warned that Nigeria’s debt is becoming unsustainable and that efficient use of borrowed funds is crucial for debt sustainability.
