The Debt Management Office (DMO) has reported that Nigeria’s total public debt reached N87.38 trillion by the end of the second quarter of 2023, representing a significant increase of N37.53 trillion (or 75.29%) compared to the N49.85 trillion recorded at the end of March 2023. This figure encompasses the N22.71 trillion Ways and Means Advances provided by the Central Bank of Nigeria (CBN) to the Federal Government.
The DMO stated that the increase was due to several factors, including new borrowings by the Federal Government and sub-national entities from local and external sources. It also noted that the government’s reforms and recommendations from the Fiscal Reform and Tax Policies Committee are expected to impact debt strategy and improve debt sustainability.
The breakdown of the debt showed that Nigeria has a total domestic debt of N54.13 trillion and a total external debt of N33.25 trillion. The domestic debt constitutes 61.95% of the total debt, while the external debt makes up 38.05%.
The DMO had earlier projected that Nigeria’s public debt burden might reach N77 trillion after the National Assembly’s approval to restructure the CBN’s Ways and Means Advances. However, the latest data revealed that the current debt stock of N87.38 trillion exceeded the DMO’s projection by N10.38 trillion.
Experts have pointed to factors such as the devaluation of the naira and increased domestic borrowing to explain the significant increase in Nigeria’s total debt. They emphasized the need to address revenue challenges and the use of debt for productive purposes to ensure sustainability.
While the government faces the challenge of servicing its growing debt, it has initiated measures like fuel subsidy removal, exchange rate reforms, and tax reform committees to boost revenue and manage the debt burden. Experts also noted that the majority of Nigeria’s debt is owed to multilateral bodies, with extended repayment periods, reducing immediate repayment pressure.
The issue of debt remains a critical aspect of Nigeria’s economic landscape, and efforts to ensure sustainable economic growth and development continue to be a priority for the government.
