Nigeria’s debt at $103bn, GDP wanes as inflation, redundancy rise

ABUJA - Nigeria’s economy is weakening as its total debt climbed to $103.11 billion with spiralling inflation and unemployment.

The dire economic situation is what the country’s outgoing President Muhammadu Buhari would hand over to the incoming president on May 29, 2023.

According to Nigeria’s Debt Management Office (DMO), the total public debt stock of the country consisted of the domestic and external debts of the Federal Government of Nigeria (FGN) and its 36 state governments.

DMO in a statement on its website took a comparative debt stock and reported that Nigeria’s debt as of December 31, 2021 was $95.77 billion.

In terms of composition, DMO said the country’s total domestic debt stock stood at $61.42 billion while total external debt stock was $41.69 billion.

“Among the reasons for the increase in total public debt stock were new borrowings by the Nigerian government and its state governments, primarily to finance budget deficits and execute projects. The issuance of promissory notes by the country’s regime to settle some liabilities also contributed to growth in the debt stock,’’ the office said in its latest release in Abuja.

However, DMO said that ongoing efforts by the government to increase revenue from oil and non-oil sectors through initiatives like the Nigerian Finance Acts and the Strategic Revenue Mobilisation Initiative were expected to support debt sustainability. It said that the total debt-to- gross domestic product (GDP) ratio for December 31, 2022 was 23.20 percent, indicating a slight increase from the figure of December 31, 2021 at 22.47 percent.

“The ratio of 23.20 percent is within the 40 percent limit self-imposed by Nigeria and the 55 percent limit recommend by World Bank/ International Monetary Fund (IMF). It is also within the 70 percent limit recommend by the Economic Community of West African States (Ecowas),’’ it said.

Nigeria’s total public debt stock as released by DMO excludes the country’s $46.8 billion indebtedness to the Central Bank of Nigeria, through Ways and Means advances.

The Ways and Means advances are presently awaiting securitisation by Nigeria’s National Assembly and can only be added to the country’s public debt after such securitisation.