Nigeria’s public debt has risen again amid a growing income crisis rocking the country. A statement released by the Debt Management Office (DMO) on Monday said the total government debt stock increased by N1.24 trillion in three months from its position as of March 30, 2022, as it amounted to 41.60 naira. billion dollars ($100.07 billion).
The new figures, which cover the domestic and external debt stocks of the Federal Government, 36 states and the Federal Capital Territory (FCT), stood at 42.84 trillion naira ($103.31 billion) as of June 30, 2022.
“The total stock of external debt was 16.61 trillion naira ($40.06 billion) as of June 30, 2022, which was about the same level as the March 31, 2022 figure, which was at 16.61 trillion naira ($39.96 billion).
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“Over 58% of the external debt stock is concessional and semi-concessional loans from multilateral lenders such as the World Bank, International Monetary Fund, Afrexim and the African Development Bank and bilateral lenders including Germany, China, Japan, India and France,” the statement said.
While the external debt was relatively what it was as of March 30, 2022, the DMO said the total outstanding domestic debt as of June 30, 2022 was 26.23 trillion naira ($63.24 billion) due to new federal government borrowing. -fund the deficit of the Appropriations (Repeal and Enactment) Act of 2022, as well as new borrowing by state governments and the FCT.
“Total public debt to GDP as of June 30, 2022 was 23.06% compared to the ratio of 23.27% as of March 30, 2022, and remains within the self-imposed limit of 40%. As the federal government continues to implement revenue-generating initiatives in the non-oil sector and block leaks in the oil sector, the debt service-to-revenue ratio remains high,” the DMO said.
Under the National Development Plan 2021-2025, which contains projections that include a 30% increase in capital expenditure to be financed by loans, Nigeria’s stock of public debt is expected to reach US$50.22 trillion. naira by 2023, with domestic debt at 28.75 trillion naira and external debt at 21.47 trillion naira.
This means that the burden of debt on Nigeria’s revenues will increase significantly. Currently, Nigeria spends over 90% of its revenue on debt servicing, a situation that creates a huge deficit in the execution of the national budget.
Last week, Finance Minister Ms. Zainab Ahmed informed the Senate Finance Committee that the proposed budget of N19.76 trillion for 2023 will have a deficit of N12.43 trillion. Although the shortfall is attributed to fuel subsidies and import waivers, Nigeria’s debt load, which eats up more revenue than the country generates, is impacting its ability to finance its budget. .
The 2022 budget performance report published in July show that the cost of servicing debt exceeded federal government retained earnings by 310 billion naira in the first four months of 2022, meaning the government borrowed to pay down debt.
All of this comes against a backdrop of low revenues from the oil sector, which is Nigeria’s main source of revenue. The oil sector is plagued by massive oil thefts and pipeline vandalism – all sabotaging the country’s oil production, which currently stands at 900,000 barrels a day, 500,000 barrels short of its OPEC quota .
Thus, Nigeria’s public debt is expected to increase more than the projected N50.22 trillion by 2023.