Nigeria’s Public Debt Hits N46.25trn – DMO

The Debt Management Office (DMO) announced on Thursday that Nigeria’s public debt stock had increased to N46.25 trillion or $103.11 billion in the fourth quarter of 2022.

Nigeria's Public Debt Hits N46.25trn - DMO
Patience Oniha, DMO DG

This total debt stock represents the combined domestic and external debt stocks of the federal government and the sub-national governments, which include 36 state governments and the Federal Capital Territory.

Compared to the public debt figure of N39.56 trillion or $95.77 billion as of December 31, 2021, the country’s debt increased by N6.69trn or $7.34bn within one year.

The DMO attributed the rise in public debt to new borrowings by the federal and sub-national governments, primarily to fund budget deficits and execute projects.

The issuance of promissory notes by the federal government to settle some liabilities also contributed to the growth in the debt stock.

The DMO further explained that the debt figure under review was 23.20% of the Gross Domestic Product (GDP), indicating that it was well within the limits set by both the federal government and international organizations.

The public debt to GDP ratio for December 31, 2022, was 23.20%, which shows a slight increase from the figure for December 31, 2021, at 22.47%.

However, this ratio of 23.20% is within the 40% limit self-imposed by Nigeria, the 55% limit recommended by the World Bank/International Monetary Fund, and the 70% limit recommended by the Economic Community of West African States.

The DMO stated that the ongoing efforts by the government to increase revenues from oil and non-oil sources through initiatives such as the Finance Acts and the Strategic Revenue Mobilization initiative are expected to support debt sustainability.

With a total domestic debt stock of N27.55 trillion (USD 61.42 billion) and a total external debt stock of N18.70 trillion (USD 41.69 billion), the DMO noted that the debt stock’s composition would continue to be monitored to ensure a sustainable level of debt.

Overall, while Nigeria’s public debt stock increased over the last year, the country’s debt-to-GDP ratio remains within acceptable limits set by the government and international organizations. The government’s efforts to increase revenue sources should support debt sustainability in the long run.

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