Nigeria’s debt per citizen has hit N217,136 ($484) amid rising poverty across states, according to analysis of data by BusinessDay.
Poverty has risen in the country in recent months, with 133 million people said to be suffering what the National Bureau of Statistics multidimensional poverty as of last year.
Data obtained from the Debt Management Office (DMO) showed that the country’s total debt grew by 14.46 percent to N46.25 trillion ($103.11 billion) in 2022.
When this is divided by an estimated population of 213 million, according to World Bank data, it gives N217,136, as a representation of what the debt per head, or debt per capita, translates into.
“Nigerians don’t even earn up to the amount that is owed; a lot of people are not conceived that the government put the borrowings into useful projects,” Tajudeen Ibrahim, the director of research and strategy at Chapel Hill Denham, said.
“N217,136 is an annual amount, and when divided by 12 to get the monthly amount, it will be an estimated amount of N18,000, which suggests that 60 percent of minimum wage will be parted away to pay the debt,” he added.
Analysts at CSL Stockbrokers Ltd said the government’s fiscal deficit for 2023 is the highest on record, as revenue mobilisation remains largely constrained and spending continues to jump.
Read also: Need to adopt e-payment channels as cashless policy comes to stay
“Considering current economic realities, which do not seem set to improve in the short term, we would likely continue to see debt levels increase and the government’s continuous reliance on ways and means financing,” CSL said in a note on Monday.
With the increasing borrowing appetite, Africa’s biggest economy uses a larger part of its resources to service its debt, and that has become of great concern to economists, especially in the wake of already lean revenues made worse by the COVID-19 pandemic.
In 2022, Nigeria’s debt service-to-revenue ratio was at 80.6 percent — a figure far above World Bank’s suggested 22.5 percent for low-income countries like Nigeria.
The International Monetary Fund (IMF) had said Nigeria may spend almost 100 percent of its revenue on debt servicing by 2026.
Debt to revenue ratio is described as the percentage of a country’s revenue that is used in servicing its debt.
With Nigeria’s debt-to-revenue ratio put at 80 percent, it shows that for every N100 obtained as revenue in the period, the government spends N80 servicing the debt.
“The fact is that the debt is increasing and it’s becoming unsustainable generally and the higher the debt, the higher the amount for servicing the debt,” Muda Yusuf, chief executive officer at the Centre for the Promotion of Private Enterprise, said.
Further findings by BusinessDay showed that as of 2015, each Nigerian owed N68,852, as the total debt owed was N12.60 trillion, based on a population estimate of 183 million people,
In 2016, Nigeria’s debt increased to N17.36 trillion, of which each citizen owed N92,340 based on a population of 188 million.
By 2017, the debt stock experienced its first significant increase to N21.73 trillion, making Nigerian’s debt per head N117,459, with an estimated population of 185 million people.
By the end of 2018, the debt stock had accelerated, hitting N24.39 trillion based on a population of 198 million. Each Nigerian’s debt had reached N123,181 by that year.
2019 ended with the debt increasing to N27.4 trillion, and each Nigerian owed N134,975. The population estimate was 203 million people.
At the end of the pandemic year, 2020, Nigeria’s total debt had increased to N32.92 trillion, and with a population estimate of 208 million, each Nigerian owed N158,269.
By the end of 2021, Nigeria’s debt was N39.56 trillion with Nigerians owing N185,727 based on a population of 213 million.
“With the debt, it means we have less revenue to do other things, like fixing infrastructure and generally,” Yusuf said.
Experts say long years of infrastructure decay and increased unemployment have triggered an increased feeling of bitterness in the hearts of many Nigerians whenever they hear the government’s intention to borrow.
“The more the government borrow, the more money we owe, and the more money to service the debt; it’s a vicious circle and this borrowing is not good for the country’s rating,” Yusuf said.
