Nigeria’s public debt stock has been projected to rise to N130 trillion this year.
The projection, which raises concerns about the country’s debt-to-gross domestic product ratio, was revealed in a report by Afrinvest, an investment management company.
The report titled, ‘Bank Recapitalisation, Catalyst for a $1tn Economy,’ and unveiled in Abuja recently, shows that Nigeria’s public debt stock, which includes external and domestic debt, stood at N121.67 trillion in the first quarter of 2024, up from N97.34 trillion in the fourth quarter of 2023.
This, according to the National Bureau of Statistics, indicates a growth rate of 24.99 per cent on a quarter-on-quarter basis.
Afrinvest projected that the fiscal deficit, total public debt stock, debt-to-GDP, and debt-servicing-to-revenue rate would exceed N13.0 trillion, N130 trillion, 55 per cent, and 60 per cent by 2024 year-end, respectively.
As of Q1 2024, Nigeria’s public debt stock was N121.7 trillion, comprising N77.5 trillion (63.6 per cent) in domestic debt and N44.2 trillion (36.4 per cent) in external debt.
Afrinvest also said the 2024 budget is based on ‘overly optimistic’ revenue assumptions, which could lead to a repeat of the historically disappointing budget performance.
According to the firm, the expectation of a 43.9 per cent share of the projected revenue from oil and other minerals is “unrealistic.”
Afrinvest further stated that “the Federal Government’s expansive borrowing plan could rub off negatively on banks’ deposits, given the attractive yields on risk-free papers as compared to interest on banks’ deposit.”
The firm, however, commended the Central Bank of Nigeria (CBN)’s move to streamline the number of Bureau De Change operators, pointing out that the supervision of BDC operations has been enhanced, and compliance has improved due to higher stakes of the operators.
