The Debt Management Office (DMO) said on Tuesday that Nigeria’s total public debt stock rose to N41.60 billion in the first quarter of 2022 from N39.56 billion in December 2021.
This shows an increase of N2.04tn over a three month period.
Public debt stock covers the total domestic and external debt of the federal government and the state and Federal Capital Territory governments.
This was revealed in a statement posted on the DMO’s website on Tuesday.
It read in part: “The total stock of government debt as of March 31, 2022 was N41.60 billion or $100.07 billion, according to the Debt Management Office.
“The amount represents the outstanding domestic and external debt of the Federal Government of Nigeria, the Thirty-six State Governments and the Federal Capital Territory. The comparative figures as of December 31, 2021 were N39.56 billion or $95.78 billion.
According to the DMO, the total stock of public debt includes the new domestic borrowings of the FGN to partially finance the deficit of the 2022 finance law, the Eurobond of $1.25 billion issued in March 2022 and the disbursements from multilateral and bilateral lenders.
He added that there were also increases in outstanding state government and FCT debt.
The DMO also said that total public debt to GDP is now 23.27%, which is below the 40% limit that Nigeria has imposed on itself.
Responding, the Director General of the Center for Promoting Private Enterprise, Dr Muda Yusuf, said the government’s growing debt profile raises serious sustainability concerns.
He said: “When we factor in CBN borrowings and AMCON debt stock, the debt profile would exceed N50tn. Although the government tends to argue that the conditions were not a debt problem, but an income challenge. But the truth is that debt becomes a problem if the revenue base is not strong enough to service the debt on a sustainable basis.
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“It invariably becomes a debt problem and maybe a debt crisis. Real government revenue can hardly cover the operating budget, which implies that the entire investment budget and part of the operating expenses are financed by loans. Surely it’s not sustainable. In November 2021, the debt service-to-revenue ratio was 76%. The situation had obviously worsened now.
“What is needed is the political will to cut spending and undertake reforms that could reduce the size of government, reduce the cost of governance and ease the government’s fiscal burden.”
According to him, it is important to ensure that the debt is used strictly to finance capital projects, especially infrastructure projects, which will strengthen the productive capacity of the economy.
He said: “That is the position of the Fiscal Responsibility Act. Also, the focus should be on concessional financing, as opposed to trade debt which is usually very expensive. »