Nigeria’s total public debt has risen to N142.3 trillion as of September 30, 2024, reflecting a 5.97% increase (N8.02 trillion) from N134.3 trillion in June 2024, according to data from the Debt Management Office (DMO). This growth is largely attributed to the depreciation of the naira, which has amplified the cost of external debt in local currency terms.
While external debt in dollar terms only saw a slight increase of 0.29% from $42.90 billion in June to $43.03 billion in September, it surged by 9.22% in naira terms, jumping from N63.07 trillion to N68.89 trillion. The depreciation of the naira from N1,470.19/$ in June to N1,601.03/$ by September played a key role in this surge.
In contrast, domestic debt decreased by 5.34% in dollar terms, from $48.45 billion in June to $45.87 billion in September. However, in naira terms, domestic debt rose by 3.10%, from N71.22 trillion to N73.43 trillion.
The Federal Government’s external debt accounted for $38.12 billion in September, a slight increase from $38.01 billion in June, while states and the Federal Capital Territory (FCT) held $4.91 billion, up slightly from $4.89 billion. Domestically, the Federal Government’s debt grew from N66.96 trillion to N69.22 trillion, while states and the FCT saw a minor decline from N4.27 trillion to N4.21 trillion.
The government’s increasing reliance on domestic debt, particularly through bond issuance, has raised concerns about the sustainability of rising debt levels, especially as interest payments consume a substantial portion of government revenue. Federal Government bonds, which make up the bulk of the domestic debt, rose by 4.47% to N54.65 trillion in September, while Nigerian Treasury Bills saw a marginal decline.
The introduction of Nigeria’s first-ever domestic dollar-denominated bond added N1.47 trillion to the domestic debt stock. Economic analysts have cautioned that Nigeria could face a debt trap unless measures are taken to manage the growing debt burden.
Meanwhile, the government remains committed to boosting revenue generation, particularly through the oil, solid minerals, and creative industries, to support critical infrastructure development and economic growth. Efforts to reduce crude oil theft and increase production are also underway to further boost revenue.
The Federal Government’s continued focus on economic reforms, including tax reforms, aims to achieve a target of 18% revenue-to-GDP ratio, which is seen as crucial for sustaining the country’s economic growth and development.
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