Nigeria's rising public debt continues to be a cause for concern at $70.85 billion

Rising public debt continues to be a cause for concern for Nigerian economy. (Professor Yemi Osinbajo and President Muhammadu Buhari pictured during an economic event in Abuja)
  • Rising public debt continues to be a cause for concern in Nigeria.
  • According to the Debt Management Office (DMO), the total external debt stands at $27.16 billion, while Domestic debt climbs to $56.72 billion.
  • Nigeria's debt profile reaches $83.88 billion in H1 2019

Nigeria’s debt stock increased by 3.11% from $68.74 billion recorded in the first quarter of 2019 to $70.85 billion (N25.70 trillion) at the end of June 2019.

The Debt Management Office (DMO) released the latest debt stats on Tuesday, October 15th. The public debt stock includes both external and domestic debt of the federal, states and the Federal Capital Territory (FCT) as at the end of June 2019.

Further analysis of the data shows that the federal government's external borrowing climbed 32.38% to $27.16 billion, while States including FCT grew by 5.10% to $4.27 billion.

On the domestic debt side, the national government debt increased by 52.19% to $43.78 billion, while the States and the FCT rose by 15.43% to $12.94 billion as of June 2019.

Overall, total external debt stood at $27.16 billion, while total domestic debt stood at $56.72 billion, according to DMO data.

Concerns mount over rising public debt

CBN MPC:

At the end of its 126th Monetary Policy Committee meeting of the Central Bank of Nigeria Communique (CBN), last month, members noted that despite momentum increase in private sector lending, rising Nigeria's public debt remains a headwind to economic growth.

The huge concerns expressed in the last MPC meeting about the increases in total public debt remain unabated. Based on the Bond Issuance Calendar of the Debt Management Office (DMO), there were three additional FGN Bond Auctions in July, August and September to raise money to part-finance the 2019 Federal Budget while additional Issuance of Eurobond is expected in the late part of 2019 or early 2020.

“As the threat of debt vulnerability continues, a coordinated domestic revenue expansion with simultaneous fiscal prudence as suggested in the last MPC meeting still remains the key to addressing the weak fiscal position of the economy,” MPC noted.

International organisations

Last year, the deputy secretary-general of the United Nations (UN), Amina Mohammed, described the state of Nigeria's debt profile as worrying.

We are now back again, in my country, the level of debt is worrying, but it is happening all over, for Africa, if that is the way we want to go, we need to sit down and have a better conversation about all the asks of a growing economy; that needs to be inclusive," Ms. Mohammed said while speaking at the International Monetary Fund (IMF) and the UN Working Together Conversation with the former IMF Chief, Christine Lagarde.

Nigeria sees challenges in revenue generation and not borrowing

But Nigeria's Minister of Finance, Budget and National Planning, Zainab Ahmed said the country's challenge is not in debt level but how to raise revenue as an alternative to borrowings.

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