Nigeria’s debt reaches N97.34 Trillion in Q4 2023, DMO reports

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Nigeria’s public debt has reached a new high of N97.34 trillion ($231.3 billion) according to the latest figures released by the Debt Management Office (DMO) for the fourth quarter (Q4) of 2023. This represents a significant increase from the previous quarter’s N90.3 trillion ($213.8 billion).

Public debt is one of the ways for a country to get extra funds for economic development. This way, a country can plan and undergo bigger projects that can aid its development.

The statement partly read, “Nigeria’s Public Debt Stock as of December 31, 2023, was N97.34tn or $108.229bn.

“This amount comprises the Domestic and External Debt Stocks of the Federal Government of Nigeria, the 36 States Governments and the Federal Capital Territory.”

Read Also: DMO reveals Nigeria’s total public debt hit N87.38tn for Q2 2023

The document revealed that this amount indicates an increase of N89.43tn over the comparative figure for September 2023 which was largely due to new domestic borrowing to partly finance the deficit in the 2024 Appropriation Act and disbursements by multilateral and bilateral lenders.

“Consistent with the debt management strategy, Nigeria’s External Debt Stock was skewed in favour of loans from multilateral (49.77 per cent) and bilateral lenders (14.02 per cent ) or a total of 63.79 per cent which are mostly concessional and semi-concessional,” the document added.

Analysts point to several factors that likely contributed, including:

• Budget deficits: The Nigerian government has consistently run budget deficits in recent years, leading to a need for borrowing to cover shortfalls.
• Falling revenue: A decline in global oil prices, a major source of income for Nigeria, could have reduced government revenue and increased borrowing needs.
• Currency depreciation: The depreciation of the Nigerian naira against major currencies like the US dollar can inflate the value of external debt denominated in foreign currencies.

The high level of debt has raised concerns about Nigeria’s ability to meet its future financial obligations. Economists warn that large debt servicing costs could crowd out spending on critical areas like infrastructure and social programs.

The DMO is expected to provide further details on the composition of the debt and the government’s debt management strategy in the coming weeks. Financial experts and citizens alike will be looking for signs of a plan to control future borrowing and ensure the country’s fiscal sustainability.