Nigeria’s Debt Burden Worsens, As National Debt Hits N44trn

Nigeria’s public debt burden has risen to N44.06 trillion in the third quarter of 2022 as it continues with the burden of repayment
A press release from the Debt Management Office (DMO) on the current debt revealed that  the total public debt stock rose from N42.84 trillion in the second quarter, to N44.06 trillion in the 3rd quarter of 2022.
This showed that there was a 2.85 per cent increase quarter-on-quarter and Nigeria acquired N1.22 trillion debt within three months.
According to the release from the DMO, the increase in public debt was due to new borrowings by the Federal Government to part-finance the deficit in the 2022 Appropriation Act, alongside new borrowings by sub-nationals.
It also noted that the total public debt stock consists of domestic debt of N26.92 trillion and external debt of N17.15 trillion.
”Total public debt stock which comprises the total domestic and external debt stock of the Federal Government of Nigeria, all State Governments and the Federal Capital Territory stood at N44.06 trillion.
“In comparison, the total public debt figure as of June 30, 2022, was N42.84tn. The total domestic stock as of September 30, 2022, was N26.92 trillion while the total external debt stock as of September 30, 2022, was N17.15 trillion.
“The increase in the debt stock was largely due to new borrowings by the Federal Government to part-finance the deficit in the 2022 Appropriation Act, as well as, new borrowings by sub-nationals”, the statement reads.
Recently, the World Bank had said Nigeria’s debt, which may be considered sustainable for now, was vulnerable and costly.
According to the Washington-based global financial institution, the country’s debt is also at risk of becoming unsustainable in the event of macro-fiscal shocks.
“Nigeria’s debt remains sustainable, albeit vulnerable and costly, especially due to large and growing financing from the Central Bank of Nigeria.
“While currently the debt stock of 27 per cent of the Gross Domestic Product is considered sustainable, any macro-fiscal shock can push debt to unsustainable levels.
“However, the debt to the GDP in Nigeria is rising quickly, and the total stock of debt in absolute value has almost doubled between 2016 and 2020, and without a policy change is expected to reach 40 per cent of the GDP by 2025”, the bank had said.
The global financial institution further expressed concerns over the nation’s cost of debt servicing, which according to it, disrupts public investments and critical service delivery spending.

By: Corlins Walter