Nigeria’s Debt Burden Rises By N6.64trn in 2021, Hits N39.55trn

Nigeria’s indebtedness to local and foreign creditors rose by N6.64trn between January 1 and December 31 last year, figures released by the Debt Management Office have revealed.

The DMO said on Thursday that Nigeria’s total public debt as at December 31, 2021, was N39.55trn or $95.77bn.

The amount represents the total external and domestic debts of the federal government, 36 state governments and the Federal Capital Territory.

The comparable figure for December 31, 2020, was N32.91trn or $86.39bn.

The public debt stock for December 31, 2021, includes new borrowings by the federal government and the sub-nationals.

The federal government had in the 2021 Appropriation and Supplementary Acts included total new borrowings from domestic and external sources of N5.48trn to part finance the budget deficit.

Borrowings for this purpose and disbursements by multi-lateral and bi-lateral creditors account for a significant portion of the increase in the debt stock.

The DMO explained that increases were also recorded in the debt stock of the states and the FCT.

The new borrowings were raised from diverse sources, primarily through the issuances of the Eurobonds, Sovereign Sukuk and FGN Bonds.

These capital raisings, according to DMO were utilized to finance capital projects and support economic recovery.

With the Total Public Debt Stock to Gross Domestic Product as at December 31, 2021, of 22.47 per cent, the agency said the Debt-to-GDP ratio still remains within Nigeria’s self-imposed limit of 40 per cent.

This ratio, it added, is prudent when compared to the 55 per cent limit advised by the World Bank and the International Monetary Fund for countries in Nigeria’s peer group, as well as, the ECOWAS Convergence Ratio of 70 per cent.

“The Federal Government is mindful of the relatively high Debt-to-Revenue Ratio and has initiated various measures to increase revenues through the Strategic Revenue Growth Initiative and the introduction of Finance Acts since 2019,” the DMO said.