Tayo Busayo, Abuja
DAILY COURIER - Nigeria’s public debt reached a staggering N142.3 trillion as of September 30, 2024, reflecting a 5.97 percent increase from N134.3 trillion in June. The debt, which combines external and domestic borrowings, highlights the challenges posed by naira depreciation and sustained borrowing to fund fiscal deficits.
Data from the Debt Management Office (DMO) revealed a marginal rise in external debt in dollar terms, from $42.90 billion in June to $43.03 billion in September. However, due to the exchange rate depreciation, external debt surged by 9.22 percent in naira terms, jumping from N63.07 trillion to N68.89 trillion.
The naira's value weakened significantly, from N1,470.19/$ in June to N1,601.03/$ in September, exacerbating the cost of external debt. Meanwhile, domestic debt increased by 3.10 percent in naira terms to N73.43 trillion, driven largely by new bond issuances.
Analysts warn that the growing debt profile could place Nigeria in a precarious fiscal position. Dr. Muda Yusuf, CEO of the Centre for the Promotion of Public Enterprises, expressed concerns about a potential debt trap, urging the government to reduce foreign borrowing.
Additionally, the Federal Government recently introduced its first domestic dollar-denominated bond, raising over $900 million in subscriptions for a $500 million issue. The five-year bond, with a 9.75 percent coupon, added N1.47 trillion to the domestic debt stock.
Despite these challenges, the Minister of Budget and Economic Planning, Abubakar Bagudu, reassured lawmakers of the government’s commitment to economic reforms under President Bola Tinubu. He cited ongoing efforts to improve revenue generation, ramp up crude oil production, and invest in critical infrastructure.
