Nigeria’s public debt has been on a steady upward trajectory, with the country’s total debt profile reaching a staggering N144.67 trillion ($94.23 billion) as of December 31, 2024. This represents a 48.58% increase from N97.34 trillion ($108.23 billion) in December 2023, raising concerns about the country’s fiscal stability and its ability to manage its debt burden.
A closer look at Nigeria’s debt profile reveals a concerning trend. The country’s external debt has surged by 83.89% from N38.22 trillion ($42.50 billion) in December 2023 to N70.29 trillion ($45.78 billion) in December 2024, largely due to new external borrowings and the impact of naira depreciation. Domestic debt has also risen by 25.77% from N59.12 trillion ($65.73 billion) in December 2023 to N74.38 trillion ($48.44 billion) in December 2024, driven by the Federal Government’s increased reliance on local borrowing to finance budget deficits and infrastructure projects.
The significant increase in Nigeria’s public debt has far-reaching implications for the country’s economy. The rising debt burden could lead to a decline in the country’s credit rating. This would make it more difficult to access international capital markets. The naira’s continued depreciation could escalate the cost of servicing foreign debt. It would add pressure on the country’s financial resources.
A trade expert at the University of Lagos, Dr. Ogunbajo believes that the rising debt could have significant implications for Nigeria’s economy. “The increase in external debt is a cause for concern. It could lead to a decline in the country’s credit rating. This may make it more difficult to access international capital markets.”
A economist at Harvard University, Professor Smith observes a broader trend. The rising debt levels are increasing in many developing countries. “The increase in debt levels in many developing countries, including Nigeria, is a concern. It highlights the need for these countries to implement fiscal reforms and improve their debt management practices.”
To address the rising debt, the Nigerian government must implement fiscal reforms and improve its debt management practices. This could include:
– Debt Restructuring: The government could consider restructuring its debt to reduce the burden of debt servicing.
– Fiscal Consolidation: The government could implement fiscal consolidation measures to reduce its budget deficit and improve its financial management.
– Investment in Infrastructure: The government could invest in infrastructure projects that generate revenue and stimulate economic growth.
The increase in Nigeria’s public debt is significant. It is a cause for concern. This highlights the need for the country to implement fiscal reforms and improve its debt management practices. The government must address the rising debt. It must ensure that it does not compromise the country’s fiscal stability.