The Debt Management Office (DMO) of Nigeria has revealed that the country’s total public debt stock increased to N46.25 trillion in the fourth quarter of 2022. The new figure comprises the domestic and external total debt stocks of the federal government and the sub-national governments, including 36 state governments and the Federal Capital Territory.
Compared to the previous year’s figures, the country’s debt increased by N6.69 trillion or $7.34 billion within one year. The Debt Management Office has attributed the increase to new borrowings by the Federal Government of Nigeria (FGN) and sub-national governments, primarily to fund budget deficits and execute projects, as well as the issuance of promissory notes to settle some liabilities.
The total public debt stock composition reveals that the total domestic debt stock was N27.55 trillion (USD 61.42 billion) while the total external debt stock was N18.70 trillion (USD 41.69 billion). Despite the increase, the DMO clarified that the debt figure under review was 23.20% of the Gross Domestic Product (GDP), which indicates that it was well within the limits set by both the federal government and international organisations.
The DMO stated that ongoing efforts by the government to increase revenues from oil and non-oil sources through initiatives such as the Finance Acts and the Strategic Revenue Mobilization initiative are expected to support debt sustainability.
Furthermore, the total public debt to GDP ratio for December 31, 2022, was 23.20 per cent, indicating a slight increase from the figure for December 31, 2022, at 22.47 per cent. The ratio of 23.20 percent is within the 40 per cent limit self-imposed by Nigeria, the 55 per cent limit recommended by the World Bank/International Monetary Fund, and the 70 per cent limit recommended by the Economic Community of West African States.
Overall, the DMO has provided a comprehensive update on Nigeria’s public debt status, including the reasons for the increase, the debt stock’s composition, and the debt sustainability indicators. The government’s ongoing efforts to increase revenue are expected to support debt sustainability, and the debt-to-GDP ratio is well within the limits set by both domestic and international organizations.