Nigeria’s rising debt profile hits N142trn in Q3 2024 as debt service rises to N3.5trn

 

Maureen Aguta

 

Amid growing concerns over Nigeria’s continued dependence on loans, new data from the Debt Management Office (DMO), which was reviewed by Advocacy Times reveals an increasing reliance on borrowing, thus accumulating fresh N8.7trillion between from July to September, 2024.

This increased Nigeria’s total public debt to N142 trillion at the end of September, 2024.

This came as President Bola Tinubu’s administration spent N3.5 trillion on debt servicing between July and September 2024.

The data also indicates that $1.338 billion was allocated to external debt servicing during the same period.

The latest data shows that as of September 2024, Nigeria’s total public debt reached N142 trillion. Of this amount, external debt accounted for N68.8 trillion, while domestic debt totaled N73.4 trillion.

The data review shows that domestically, the Federal Government alone owes N69.2 trillion, while states and the Federal Capital Territory (FCT) owe N4.2 trillion.

The data shows that the country has relied heavily on local sources for its loan portfolio.

The newly published total debt profile is more than the N134.2 trillion which Nigeria owed as of June 2024.

Total external debt of the country as of June 2024 stood at N63 billion, while domestic debt stood at 71.2 trillion.

Of this amount, the Federal Government’s domestic debt stood at N66.9 billion while states stood at N4.2 billion.

Data reviewed shows that between July and September, the federal government borrowed N2.2 trillion more locally and another N5.8 trillion externally.

The devaluation of naira may have worsened the country’s fate in terms of how much it owes. In June 2024, the exchange rate of the country was N1470.19 to a dollar, but by September 2024, it has moved to N1601.

This development on increased loans negates President Bola Tinubu’s promises.

In August 2023, President Tinubu promised to reduce Nigeria’s reliance on loans.

At the inauguration of the Presidential Committee on Fiscal and Tax Reforms, he admitted that debt servicing was consuming Nigeria’s ‘meagre’ resources, noting that it has put the economy in a vicious cycle of borrowing simply to service debts.

According to him, it leaves almost no scope for socio-economic development.

Despite this situation, the administration of President Tinubu has continued to rely heavily on loans, according to details published by the Debt Management Office (DMO).

As of May 29, 2023, when Tinubu came into office, the public debt profile of the country stood at N87.3 trillion. By growing to N142 trillion by September 2024 trillion means that the public debt profile of the country has grown by N54.7 trillion.

The government, in the DMO data announcing the country’s total public debt, noted that the exchange rate as of September 2024 stood at ₦1601/$1. This implies that a total of ₦2.1 trillion ($1.338 billion multiplied by ₦1601) was spent on external debt servicing between July and September.

The country took loans externally from sources such as African Development Bank, Africa Growing Together Fund, International Fund for Agricultural Development, Islamic Development Fund among others.

The $1.338 billion spent on external debt servicing between July and September, is more than the $1.120 billion spent between April and June 2024. It is also more than the $1.120 billion spent between January and March 2024, on external debt servicing.

Domestically, the country recorded N1.4 trillion for debt servicing. The money was broken down into N276.3 billion in July, N457.7 billion in August and N699.2 billion in September.

Between January and June, the government spent N2.8 trillion on servicing debts domestically.

The sum of N252.8 billion was spent in January 2024, N168.6 billion was spent in February, N567.8 billion was spent in March, N482.4 billion was spent in April, N1.085 trillion in May and N295.5 billion in June.

With the government spending N3.5 trillion on debt servicing between July and September, it would mean that what was spent is more than the N2.2 trillion revenue retained by the federal government between July and September, according to details published by the Central Bank of Nigeria.