FG Plans to Borrow to Finance 2023 Budget as Debt Profile Hits N42.84 Trillion

With the drop in oil production and Nigeria’s revenue generation, Nigeria’s public debt is projected to increase further in 2022 and 2023.

According to the Debt Management Office (DMO), Nigeria’s total public debt stock is presently N42.84 trillion, or $103.31 billion as of June 2022. 

As of March 2022, Nigeria’s total debt profile was N41.60 trillion or $100.07 billion. This shows an increase of N1.24 trillion in three months. 

Investors King learnt from the statement published on the DMO website on Tuesday that the total debt represents the domestic and external debt stocks of the federal government, the 36 states and the Federal Capital Territory (FCT).

The statement further clarified that the foreign component of the debt stands at N16.61 trillion, or $39.96 billion, the same figure it was in March 2022. While the local component increased to N26.23 trillion or $63.24 billion.

The statement also disclosed that a higher proportion (58 percent) of the external debts were concessional and semi-concessional loans which the government obtained from multilateral financial institutions such as the International Monetary Fund (IMF), the World Bank, Afrexim and African Development Bank. 

These concessions and semi- concessions include loans from bilateral lenders such as Germany, China, Japan, India and France,”

Meanwhile, the increase in domestic debt stock from N24.98 trillion or $60.1 billion in March to N26.23 trillion or $63.24 billion in June was due to the credit facilities which the Federal Government raised to part-finance the deficit in the 2022 budget. 

Nigeria’s rising debt profile has been a major subject of discussion among analysts. Investors King earlier reported that the 2023 budget proposal has a deficit of more than N12 trillion which will likely be financed by another set of borrowings and subsequently increase the country’s debt profile. 

Nevertheless, the Debt Management Office, however, stated that Nigeria’s Debt-to-GDP ratio remains under control at 23.06 percent, Nigeria’s self-imposed limit of 40 percent.