Public debt hit N46trn!


*DMO says Nigeria’s public debt rose to N46trn at end of 4th quarter of 2022

*Domestic debt stood at N27.55trn while external debt stood at N18.70trn

*That figure represents increase of N6.69 compared with December 31, 2021

*Explains debt rise due to borrowings for projects execution, budget deficit

By Our Correspondent with agency report

The Debt Management Office, DMO has revealed that the country’s total debt profile hit a whooping sum of N46.25 trillion at the end of the fourth quarter of 2022.

The Agency in a statement released in Abuja on Thursday said the comparative debt stock for December 31, 2021 was N39.56 trillion which represents an increase of N6.69 trillion when compared with the latest figure.

It would be recalled that the country’s public debt consists of domestic and external debt stocks of the federal government of Nigeria (FGN) and the sub-national governments, the 36 state and the federal capital territory (FCT).

According to the DMO, the 2022 data is also an increase of about N2 trillion compared to the N44.6 trillion recorded in the third quarter of the same year explaining that the debt rise was due to borrowings for the purpose of projects execution and financing of the budget deficit.

The agency added that the issuance of promissory notes to settle liabilities also contributed to the growth of the domestic debt.

“In terms of composition, total domestic debt stock stood at N27.55 trillion, while total external debt stock was N18.70 trillion,” the debt office said.

“Among the reasons for the increase in total public debt stock were new borrowings by the federal government and sub-national governments, primarily to finance budget deficits and execute projects.

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

The agency, however, said ongoing efforts by the federal government to increase revenue from oil and non-oil sources through initiatives like the Finance Act and the Strategic Revenue Mobilisation Initiative are expected to support debt sustainability.

The Agency further stated that the total debt-to-gross domestic product (GDP) ratio for December 31, 2022, was 23.20 percent; a slight increase from the figure of December 31, 2021, which was 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 recommended by the World Bank/International Monetary Fund (IMF),” the organisation added.

“It is also within the 70 percent limit recommended by the Economic Community of West African States (ECOWAS)”, it added.

It would also be recalled that last year, Zainab Ahmed, Minister of Finance, Budget and National Planning, had said the federal government would finance the 2023 budget deficit by borrowing more funds.