A new report from investment management company Afrinvest has predicted that Nigeria’s public debt will rise to ₦130 trillion by December 2024. This will mean an increase from ₦121.67 trillion in the first quarter of this year.
The report, titled “Bank Recapitalisation, Catalyst for a $1tn Economy,” shows growing concerns about the country’s debt-to-GDP ratio.
As of Q1 2024, Nigeria’s debt has increased by 24.99% compared to the same period last year. The implications of this rising debt are serious. The Debt Management Office warned that the debt-to-GDP ratio could exceed 55 per cent, and the debt servicing costs may consume over 60 per cent of government revenues. This situation limits the government’s ability to invest in essential areas like healthcare, education, and infrastructure that can boost growth. The fiscal deficit is projected to hit ₦13 trillion as well.
In a related comment, Oseni Rufai, a Nigerian journalist lamented:
“The federal government suffered a massive budget deficit in the first quarter of 2024, missing its revenue target of N2.69 trillion by a whopping 745 per cent. The accountant general of the federation, Oluwatoyin Madein said the federal government revenue inflows amounted to a total of N318.5 billion in the first quarter of the year, 2024.”
Recall that President Bola Tinubu recently approved a ₦28.7 trillion budget, which included an estimated revenue of ₦18.32 trillion and a deficit of ₦9.18 trillion.
In July, the Nigerian Senate approved an $800 million loan request from the World Bank, and the Finance Minister confirmed a separate loan of $2.25 billion was approved in June. The Finance Minister also announced that Nigeria will issue domestic foreign currency-denominated bonds in the sum of $500 million from August.
Afrinvest attributed Nigeria’s rising public debt levels to overly optimistic revenue assumptions in the 2024 budget. These assumptions rely heavily on projected oil and mineral revenues. The report warned that these expectations may lead to disappointing budget performance, similar to past trends.
Read: Hilda Baci, Elsa Majimbo, Burna Boy, Others Recognized In TikTok’s Visionary Voices Africa List
About The Author
