Nigeria’s debt has risen as of the end of June 2019 and the total debt balance rose to N25.7 trillion (US$ 83.8 billion). This is included in the latest Debt Management Office (DMO) report. The estimate lifts net lending to approximately N754 billion.
As of June 30, 2019, Nigeria’s total debt portfolio grew to N25.7 trillion compared to N24.9 trillion reported in March 2019, according to the latest report published by DMO. That is, Nigeria raised its debt by N754.56 billion within three months, reflecting a rise of 3.2 percent.
The overall debt stock of Nigeria is both foreign and domestic debt. The gross external debt of the country grew to N8.32 trillion ($27.1 billion), representing around 32.38 percent of the total debt inventory, according to the latest DMO estimate. While domestic debt accounts for 67.68%.
While the debt profile in Nigeria hit a new height in the second quarter of 2019 (thanks to the federal government), the debt servicing value just hit another height. There have been growing concerns about Nigeria’s debt service in recent times.
Experts have noted that while the debt-to-GDP ratio of the country may be manageable in the meantime, the debt servicing expense is eating deeply into the already depleting income of the government.
President Muhammadu Buhari delivered the specifics of the budget dubbed “Budget of Sustainable Growth and Job Creation” to a joint session of the National Assembly on Tuesday, October 8, 2019. Specifically, the total expenditure for the 2020 budget is now N10.33 trillion. Although analysts criticized the budget for lack of wit, marked by repetitive elements and ambitious expectations, the budget proposal showed debt services would gulp an additional N2.45 trillion.
The amount of N1.7 trillion will be borrowed to fund the 2020 budget, according to the Minister of Finance, Budget and National Planning, Mrs. Zainab Shamsuna Ahmed. As previously published on Nairametrics, in a new tranche of concessionary loans, Nigeria has already approached the World Bank for another $2.5 or N767.3 billion loan.
Experts have raised concerns about borrowing to finance the budget. Following the presentation of the budget, the Lagos Chamber of Commerce and Industry (LCCI) recently stated that from the total budget size of N10.3 trillion, having a recurring component of N4.88tn and N2.45 trillion debt service means that there is not much left for infrastructure development.