President Tinubu Warns Against Unsustainable Borrowing Amid N121.67 trillion Debt
Nigeria’s total public debt reached N121.67 trillion (equivalent to 91.46 billion dollars) as of March 2024, according to the Debt Management Office (DMO). Director-General Patience Oniha disclosed that this debt encompasses both external and domestic borrowings by the federal government, 36 state governments, and the Federal Capital Territory (FCT). Specifically, domestic debt totaled N65.65 trillion (46.29 billion dollars), while external debt stood at N56.02 trillion (42.12 billion dollars).
“Excluding Naira exchange rate movements in the first quarter of 2024, only the domestic debt component of the total debt stock grew from N59.12 trillion on 31 December 2023 to N65.75 trillion on 31 March.
“The increase was from new borrowing to part-finance the 2024 budget deficit and securitisation of a portion of the N7 3 trillion Ways and Means advances at the Central Bank of Nigeria (CBN),” she said.
The increase in the total debt stock was primarily driven by heightened domestic borrowing aimed at funding the deficit in the 2024 budget, exacerbated by volatility in the foreign exchange market during the first quarter. Oniha attributed this rise to new borrowings intended to cover budget shortfalls and the securitisation of a portion of the N7.3 trillion Central Bank of Nigeria (CBN) Ways and Means advances.
Although, emphasizing the necessity of boosting government revenue to ensure debt sustainability, Oniha underscored the continuation of borrowing as outlined in the 2024 budget. Meanwhile, the government anticipates approval of fresh loans totaling $4.4 billion from international lenders and the African Development Bank within the next year.
However, President Bola Tinubu expressed his administration’s resolve to break the cycle of excessive reliance on borrowing for public expenditure, highlighting the burden of servicing debts with a significant portion of government revenue. He warned that such a path is unsustainable and could lead the country towards destruction, stressing the need for difficult yet essential reforms to secure Nigeria’s future.
The President said, “Can we continue to service external debts with 90 per cent of our revenue? It is a path to destruction. It is not sustainable. We must make the very difficult changes necessary for our country to get (wake) up from slumber and be respected among the world’s great nations.
“To build a great nation, we must make bold decisions; even though it may be painful, it is not about you and me. It is about generations yet unborn.”
