Nigeria is now on a public debt of ₦97.3trn

Nigeria's national debt burden has experienced a significant surge, increasing by 10.7% from N87.87 trillion in the third quarter of 2024 to N97.34 trillion as of December 31, 2023, according to recent data released by the Debt Management Office (DMO) in Abuja on Friday. This substantial rise in public debt is largely attributed to the government's new borrowing initiatives aimed at partially financing the fiscal deficit outlined in the 2024 Appropriation Act.

The DMO's report revealed that the total public debt of N97.3 trillion comprises two main components: domestic debt, which stands at N59.12 trillion, and external debt, which amounts to N38.22 trillion. Notably, a significant sum of $3.5 billion was utilized to service external debt during the review period, highlighting the substantial financial resources required to manage the country's debt obligations.

The increase in public debt has sparked concerns among economic experts and stakeholders, who fear that the country's debt burden may become unsustainable if not properly managed. However, the DMO has reaffirmed its commitment to employing the best practices in public debt management, ensuring transparency, and implementing effective strategies to mitigate debt-related risks.

Furthermore, the Office is dedicated to exploring innovative revenue streams to support debt sustainability, thereby promoting economic stability and growth in the long term. The DMO's efforts aim to strike a balance between borrowing to finance development projects and maintaining a sustainable debt level.

Nigeria's debt profile has been on an upward trend in recent years, largely due to the government's reliance on borrowing to finance its budget deficits. The country's debt servicing costs have also increased significantly, placing a strain on the nation's finances.

Despite these challenges, the DMO remains committed to ensuring that Nigeria's debt remains sustainable and does not pose a risk to the country's economic stability. The Office is working closely with other government agencies and stakeholders to develop strategies aimed at reducing the country's debt burden and promoting economic growth.

In addition, the DMO is exploring innovative financing options, such as green bonds and sukuk, to diversify the country's funding sources and reduce its reliance on traditional borrowing instruments. These efforts aim to promote economic development while ensuring that Nigeria's debt remains sustainable and manageable.

The surge in public debt has also highlighted the need for the government to prioritize revenue generation and diversification. Nigeria's reliance on oil revenues has made it vulnerable to fluctuations in global oil prices, and the country needs to develop other revenue streams to reduce its dependence on oil.

In conclusion, Nigeria's significant increase in public debt is a cause for concern, but the DMO's commitment to effective debt management and exploring innovative revenue streams offers hope for a sustainable economic future. By striking a balance between borrowing and revenue generation, Nigeria can promote economic stability and growth while managing its debt burden effectively.