Nigeria’s Public Debt Climbs to N49.85trn Amid Declining Revenue

Nigeria’s total public debt as of March 31st, 2023, has risen to N49.85 trillion ($108.30 billion) from N46.25 trillion recorded on December 21st, 2022, according to a statement issued by the Debt Management Office (DMO) on Friday evening.

In its statement, the DMO also noted that the recently securitized Ways and Means loans, amounting to N22.719 trillion, would be included as part of the federal government’s domestic debt starting from June 2023.

“As at March 31, 2023, the Total Public Debt Stock comprising the external and domestic debts of the Federal Government of Nigeria (FGN), the thirty-six (36) States, and the Federal Capital Territory (FCT) was N49.85 Trillion (USD 108.30 Billion).

“Comparatively, the Total Public Debt Stock for the preceding period, December 31, 2022, stood at N46.25 Trillion (USD 103.31 Billion). During the period, there were increases in the debt stock of the FGN, States, and the FCT.

“The Public Debt Stock for March 2023 does not include the FGN’s N22.719 Trillion Ways and Means Advances of the Central Bank of Nigeria whose securitization was approved by the National Assembly in May 2023. The amount will be included in the FGN’s Domestic Debt Stock from June 2023,” the DMO said.

Judging by the current exchange rates orchestrated by the recent monetary policy introduced by President Bola Tinubu, the debt figure is expected to rise significantly above the N49.85 trillion declared by the DMO to nearly N80 trillion.

Earlier this month, the Central Bank of Nigeria (CBN) announced the floating of Nigeria’s forex market, in a move to unify multiple exchange rates. The decision has seen the naira depreciate as much as N815 per dollar in the Investor & Exporter window.

This development has prompted calls for the review of the nation’s public debt profile.

On Thursday, the DMO warned the federal government against taking further loans. The office said 73.5% of this year’s revenue will be used to service debt, creating an unsustainable high Debt Service-to-Revenue ratio.

Nigeria’s public debt profile saw a staggering increase to roughly N50 trillion in 2023, from N12 billion in 2015, during the administration of former President Muhammadu Buhari. This also includes the Ways and Means borrowings, which happened in breach of the CBN Act.
The present administration is facing the harsh reality of a depleted treasury – resulting from oil revenue shortfalls.

Against this backdrop, DMO said concerning expansion in fiscal deficit, there is a need to strictly adhere to the provision of extant legislations on Government borrowing, especially the Fiscal Responsibility Act 2007 and Central Bank of Nigeria Act, 2007 as it relates to Ways and Means Advances, in order to moderate the growth rate of public debt.

The office also said there is an urgent need to pay more attention to revenue generation by implementing far-reaching revenue mobilization initiatives and reforms including the Strategic Revenue Growth Initiatives and all its pillars with a view to raising the country’s tax revenue to GDP ratio from about 7 percent (one of the lowest in the world) to that of its peer.