Nigeria’s total public debt surged by 11.4% to N97.1 trillion by the close of 2023, highlighting the country’s growing reliance on both local and international loans. This is a sharp increase from N87.4 trillion recorded in June 2023, reflecting a rise of nearly N10 trillion over the second half of the year. The Federal Government (FG), states, and the Federal Capital Territory (FCT) were responsible for adding the majority of this new debt.
As of December 2023, the total external debt amounted to N38.22 trillion, with the FG alone owing N34.07 trillion, while the states and FCT owed N4.15 trillion. The FG’s external debt grew by 14% from N29.89 trillion in June 2023, marking an increase of N4.18 trillion in just six months. States and the FCT’s external debt rose by N795.71 billion, reaching N4.15 trillion by the end of the year.
This increase in external debt was mirrored by a rise in domestic borrowing. The FG’s domestic debt stood at N53.26 trillion by the end of 2023, compared to N48.31 trillion in June, while states and the FCT owed N5.86 trillion, slightly up from N5.82 trillion six months earlier. Together, domestic debts now account for 60.7% of the country’s total public debt, while external debts represent 39.3%.
In the 2024 fiscal year, the Nigerian government has set aside a deficit of N7.83 trillion, which will be financed by new domestic borrowing of N6.06 trillion and external borrowing of N1.77 trillion. The domestic borrowing will be covered by the issuance of government securities, including bonds, treasury bills, and green bonds, while the external borrowing will largely consist of Eurobonds and new loans from multilateral and bilateral sources.
Meanwhile, debt servicing remains a significant financial burden for the country. According to data from the Debt Management Office (DMO) and the Central Bank of Nigeria (CBN), Nigeria allocated a total of $3.5 billion for debt servicing in 2023. Monthly servicing costs varied, with some months seeing higher expenditures, such as July, where $641.69 million was spent. In contrast, December 2023 saw a reduced outlay of $65.69 million. This trend reflects the ongoing challenge of balancing debt repayment obligations with the need to fund other national priorities.
The rising debt burden and high costs associated with servicing it are expected to continue to be major topics in Nigeria’s economic policy discussions throughout 2024.
