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Nigeria’s debt to hit N130tn in December – Report

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Nigeria’s total debt stock is expected to surge to N130 trillion by December 2024, up from N121.67 trillion in the first quarter of the year, according to a new report by Afrinvest. This significant increase raises concerns about the country’s debt-to-GDP ratio and fiscal health.

The report, titled ‘Bank Recapitalisation, Catalyst for a $1tn Economy,’ highlights a worrying trend: Nigeria’s public debt has jumped from N97.34 trillion in Q4 2023 to N121.67 trillion in Q1 2024—a 24.99 percent rise year-over-year.

Afrinvest warns that the 2024 budget’s overly optimistic revenue projections could lead to another underperformance, with an estimated fiscal deficit, total public debt, debt-to-GDP ratio, and debt-servicing-to-revenue ratio all set to exceed N13 trillion, N130 trillion, 55 percent, and 60 percent, respectively, by year-end.

The report also criticizes the unrealistic expectations for revenue from oil and minerals, which it describes as a significant factor in the escalating debt. Notably, the Federal Government’s share of total public debt has increased by 44.6 percent year-on-year, reaching N487.3 trillion and accounting for nearly 90 percent of the total debt.

In recent developments, President Bola Ahmed Tinubu signed a record N28.7 trillion budget for 2024, with a projected revenue of N18.32 trillion and a deficit of N9.18 trillion. Additionally, the Senate has approved a $800 million loan request from the World Bank, following a $2.25 billion loan approval in June 2024.

The growing debt and fiscal challenges underscore the urgent need for effective budget management and realistic revenue forecasts.