Nigeria’s Debt is ballooning and in the twenty-five years of democracy since 1999, the debt rose from just over three trillion Naira to more than one hundred and twenty-one trillion Naira by the first quarter of 2024.
Some have called the period 25 Years of ‘Democratic’ Debt Accumulation.
A report by analysts at ADSR based in Ibadan say the public debt stock of Africa’s most populous nation stood at N3.37trn in 1999 when the military handed over to elected civilians. The public increased to N46.2trn in 2022 and N97.34trn in 2023 and has now reached N121.67trn in 2024’Q1. It is expected to rise even further.
Of key interest is that the foreign component of Nigeria’s debt is now gaining prominence, rising from about 10% of total public debt stock in 2010 to 46% in 2024’Q1.
The economists said the recent astronomic rise is attributable to new borrowing, the effect of currency devaluation as well as the securitisation of the relentless ways and means extended by the Central Bank of Nigeria to government under the Buhari administration.
A further breakdown shows that the Debt-GDP ratio which stood at 61.51% in 1999 fell to 7.26% in 2006 after Nigeria got debt relief, but the debt level is now back to the pre-debt relief years.
According to the report by ADSR, “Nigeria needs to improve its focus on the quantity and quality of assets created using these debts. This is necessary for its fiscal and public debt sustainability.”
