Nigeria’s debt balloons to N49.8 trillion as DMO warns Tinubu against borrowing

• Nigeria’s public debt is hitting N50 trillion, according to a statement from the Debt Management Office (DMO)
• The DMO said the current figure does not include the N22.7 trillion owed to the Central Bank of Nigeria (CBN) by the Federal Government
• The development follows a warning by the DMO to the government of President Bola Tinubu against further borrowing

According to the Debt Management Office (DMO), Nigeria’s total public debt has risen to $108.3 billion, about N49.8 billion.

The DMO said in a statement on Friday, June 23, 2023, that the figure, which is money owed by the federal government, does not include the federal government’s N22.7 trillion Ways and Means Advances of the Central Bank of Nigeria (CBN).

The DMO said:

“As of 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 N49.85tr ($108.30bn).

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“Comparatively, the Total Public Debt Stock for the preceding period, December 31, 2022, stood at N46.2tr ($103.3bn). 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.”

Analysts sound the alarm

Daily Trust reports that experts have warned the current administration of President Bola Tinubu against incurring more debts.

The development follows a warning issued by the DMO to the federal government against further borrowing, stating that about 73.5% of this year’s revenue will be used to service debt.

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DMO warns Tinubu

The DMO said the high debt service-to-revenue ratio is unsustainable and threatens debt sustainability.

It recommended that the federal government focuses on increasing revenue generation to achieve a sustainable debt service-to-revenue ratio.

The DMO also suggested raising the projected federal government revenue from N10.49 trillion to about N15.5 trillion.

A Channels Television reports that the DMO’s analysis says the total public debt to GDP is projected to increase to 37.1% in 2023, primarily due to new borrowings, the federal government’s Ways and Means at the CBN, and Promissory Notes issuances.

Nigeria’s debt stock hits N82 trillion amid CBN’s naira devaluation

Legit.ng reported that Nigeria’s public debt has risen to N82 trillion from N77 trillion before the Central Bank of Nigeria (CBN) exchange rate unification, announced on Wednesday, June 14, 2023.

According to a press release by the CBN, all exchange rate windows are collapsed into the Importers and Exporters (I&E) window, showing a merger of the multiple exchange rates.

The unification has seen the naira fall to N664 per dollar and has attracted severe consequences for the nation’s economy, including a spike in public debt.

Source: Legit.ng