IMF raises alarm, predicts Nigeria’s debt will surge by 4.3% in 2024

The IMF gave this warning in its recent report titled ‘Africa: Special Issue: In Pursuit of Stronger Growth and Resilience,’ where it predicted that by 2024, the debt incurred by the Nigerian government will increase by 4.3% of its GDP from 38.8% recorded in 2023.

This is coming as the President, Bola Tinubu just proposed a ₦26 trillion budget for the 2024 fiscal year following the approval of the Medium-Term Expenditure Framework for 2024 – 2026.

The IMF report however, has forecasted that Nigeria’s real GDP will witness a significant growth from 2.9% recorded in 2023, to 3.1% in 2024. 

According to the report, this inflation-adjusted measure which reflects the value of the country’s economic output in a given year is expected to reach $489.80 billion by the end of 2023 and potentially peak at $504.99 billion in 2024.

The IMF further predicted that despite the challenges the country faces due to its increasing debt and inflation, the Nigerian economy will rebound as the country's real GDP will grow to 3.1 % in 2024, adding that it was important for sub-Saharan Africa to adopt precautionary measures.

While giving more insight on the issue, the Director, African Department of the IMF, Abebe Aemro Selassie said despite external challenges, the expected growth is broad-based and optimistic.

Selassie highlighted four policy priorities which African governments should focus on which include addressing inflation, reducing debt vulnerabilities, managing exchange rates, and investing in key sectors like health, education, and infrastructure.

Nigeria’s government debt to GDP has maintained a steady rise from 2019 till date rising from 21.9% in 2019 to 34.5% in 2020. The figures increased to 36.5% in 2021 and a further increase to 39% was recorded in 2022.

Meanwhile the Debt Management Office (DMO) had earlier projected that in 2023, Nigeria’s total public debt could hit 37.1% of its GDP nearing the government’s self-imposed 40% limit.