Nigeria’s Fiscal Woes Deepen as Total Public Debt Hits N121.67 Trillion in Q1 2024


Nigeria’s debt burden has significantly escalated, with the total public debt of federal and state governments reaching N121.67 trillion ($91.46 billion) as of March 31, 2024. This marks a N24.33 trillion (24.99%) increase from the N97.34 trillion ($108.23 billion) recorded on December 31, 2023, driven by naira depreciation and increased borrowing to finance the 2024 budget deficit.

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According to the latest statistics from the Debt Management Office, domestic debt stands at N65.65 trillion ($46.29 billion), representing 54% of the total debt, while external debt is at N56.02 trillion ($42.12 billion), making up the remaining 46%. The 36 states and the Federal Capital Territory (FCT) contribute $3.1 billion in external debt and N4.068 trillion in domestic debt.

Over the past year, Nigeria has secured $4.95 billion in loans from the World Bank amid rising concerns about the costs of servicing external debt. The government expects to receive an additional $4.4 billion in loans from international financial institutions, including the African Development Bank, in the coming year. Recently approved projects by the World Bank, totaling $4.95 billion, include funding for power sector financing, women’s empowerment, girl-child education, renewable energy solutions, resource mobilization reforms, and economic stabilization reforms, further contributing to the country’s debt levels.

The devaluation of the naira by the Central Bank of Nigeria (CBN) has significantly contributed to the increase in total public debt. Despite exchange rate effects, domestic debt alone rose by 11.05% (N6.53 trillion), from N59.12 trillion on December 31, 2023, to N65.65 trillion on March 31, 2024. The Debt Management Office attributes this rise to new borrowing for the 2024 budget deficit and the securitization of a portion of the N7.3 trillion Ways and Means advances from the CBN.

Cowry Research highlights Nigeria’s limited revenue base as the main driver of its rising debt levels, raising concerns about the government’s ability to meet its debt obligations. The high cost of debt servicing, exacerbated by naira devaluation, has diverted substantial government revenues towards debt payments, intensifying the fiscal challenge.

As noted in Cowry Research’s 2024 Outlook report, these challenges are compounded by the CBN’s foreign exchange harmonization and revaluation efforts, increasing the cost of debt servicing. With Nigeria’s debt denominated in both domestic and foreign currencies, the nation is susceptible to external shocks, such as interest rate and exchange rate fluctuations. This underscores the urgent need for a sustainable debt management strategy and diversification of revenue sources to enhance fiscal resilience and mitigate risks associated with the growing debt burden.

Despite ongoing reforms, including the removal of fuel subsidies and aggressive revenue generation efforts, the gradual increase in total debt stock, particularly external debt, highlights Nigeria’s continued reliance on borrowing to cover budget shortfalls and financial obligations.I’m

Godwin Okafor, The Naija247news
Godwin Okafor, The Naija247news
Godwin Okafor is a veteran Financial Journalist, Internet Social Entrepreneur, and the visionary Founder of Naija247news Media Limited. With an extensive career spanning over 16 years in financial journalism, Godwin possesses a wealth of experience that seamlessly bridges both traditional and digital media landscapes. His journey in journalism commenced at Business Day, Nigeria, where he laid the foundation for his prolific career. In 2010, Godwin took a bold step by founding Naija247news Media, a platform that has since become a prominent player in delivering timely and accurate news. Educationally, Godwin Okafor holds a Bachelor's degree in Industrial Relations and Personnel Management from the prestigious Lagos State University, Ojo, Lagos. His commitment to continuous learning led him to the Lagos Business School, where he further honed his skills. Additionally, he is recognized as a Fellow of the University of Pennsylvania, having successfully completed the Wharton Seminar for Business Journalists. Throughout his illustrious career, Godwin has earned acclaim by winning numerous journalism awards, a testament to his dedication to excellence in reporting. Beyond his role as a Financial Journalist, Godwin Okafor wears the hat of the Chairman at Emmerich Resources Limited, the publishing entity behind Naija247news. His visionary leadership has played a pivotal role in shaping the media landscape and establishing Naija247news as a trusted source of information. Godwin Okafor's multifaceted expertise, commitment to journalistic integrity, and leadership in the realm of business journalism underscore his influential presence in both the media and entrepreneurial spheres.

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