Nigeria’s Debt Burden Increases by ₦24.33 Trillion in Three Months, now ₦121.67 Trillion.

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The Debt Management Office (DMO) has revealed that Nigeria’s external and internal debt as of March 31, 2024, stood at ₦121.67 Trillion (approximately $91.46 billion), an increase of ₦24.33 Trillion from ₦97.34 trillion ($108.23 billion) it was in December 2023.

The DMO blames the sharp increase of the debt profile on fluctuating foreign exchange rates (it used ₦899.39 to convert external debt in December 2023 against ₦1,330/$ used as benchmark now) and new borrowing undertaken to partly finance the 2024 budget deficit.

It noted that “the increase was from new borrowing to part-finance the 2024 Budget deficit and securitization of a portion of the ₦7.3 trillion Ways and Means Advances at the Central Bank of Nigeria”.

“Whilst borrowing, as provided in the 2024 Appropriation Act, will continue, we expect improvements in the Government’s Revenue to enhance debt sustainability.”

Also, the statement attributed some of the debt to “securitization of a portion of the ₦7.3 trillion Ways and Means Advances at the Central Bank of Nigeria.” 

The statement from the DMO read: “Nigeria’s Total Public Debt, comprising the Total Domestic and External Debts of the Federal Government of Nigeria (FGN), the thirty-six (36) state governments, and the Federal Capital Territory (FCT), stood at ₦121.67 trillion (USD91.46 billion) as of March 31, 2024. The comparative figure for December 31, 2023, was ₦97.34 trillion (USD108.23 billion). Total Domestic Debt was ₦65.65 trillion (USD46.29 billion) while Total External Debt was ₦56.02 trillion (USD42.12 billion). 

“Excluding Naira exchange rate movements in Q1 2024, only the Domestic Debt component of Total Public Debt grew from ₦59.12 trillion on December 31, 2023, to ₦65.65 trillion on March 31, 2024. The increase was from new borrowing to part-finance the 2024 Budget deficit and securitization of a portion of the ₦7.3 trillion Ways and Means Advances at the Central Bank of Nigeria.” 

Recall President Bola Tinubu had expressed his administration’s commitment to breaking the cycle of overreliance on borrowing for public spending and the resultant burden of debt servicing it placed on the management of limited government revenues.

The president said recently, “Can we continue to service external debts with 90 per cent of our revenue? It is a path to destruction. It is not sustainable. We must make the very difficult changes necessary for our country to get (wake) up from slumber and be respected among the world’s great nations.

“To build a great nation, we must make bold decisions; even though it may be painful, it is not about you and me. It is about generations yet unborn.”

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