Nigeria’s Total Debt Estimated to Hit 54.6% of GDP in 2024
As the government continues to borrow, Nigeria’s debt clock is predicted to accelerate even more. Total debt to gross domestic product (GDP) is estimated to settle at 54.6% at the end of 2024, analysts at Cordros Securities said in a commentary note.
In its latest update, the Debt Management Office said Nigeria’s public debt increased by 10.4% between March and June 2024 to N134.30 trillion. In the first three months of 2024, Nigeria’s total debt had printed at N121.67 trillion but grew due to increased borrowing and naira devaluation as of the end of June.
Analysts at Cordros Securities Limited specifically attribute the increase to new borrowings to finance rising government expenditures against persistent revenue underperformance, as well as the impact of the naira depreciation on foreign debt.
In the note, Cordros Securities said there was a broad-based increase across the domestic and external debt stock. Data released by DMO showed that domestic debt accounted for 53% of total public debt while foreign debt contributed 43% as of June 2024.
Specifically, the total domestic debt stock rose by 8.5% between March and June to settle at N71.22 trillion from N65.65 trillion in the first quarter of the year.
Details revealed that total external debt increased by 1.9% at the same period to USD 42.90 billion, a moderate decline, reflecting additional borrowing from the World Bank totaling USD 1.22 billion. There was also IMF loan repayment of USD 418.8 million in the same period.
In naira terms, total external debt rose by 12.6% between March and June 2024 to N63.07 trillion from N56.02 trillion in Q1-2024 using an average exchange rate value of N1,470.19/USD in Q2-24, compared to N1,330.26/USD in Q1-24.
Total debt on a year-on-year basis grew by 53.7%, pushing the country’s debt-to-GDP ratio to 50.8%, Cordros said in the commentary note. Analysts anticipate a significant increase in Nigeria’s total debt due to additional borrowings by the Federal Government to fund the 2024 budget deficit and the impact of the depreciation of the naira on foreign debt.
“We project total public debt to settle at N144.34 trillion, or 54.6% of GDP in 2024,” Cordros said. #Nigeria’s Total Debt Estimated to Hit 54.6% of GDP in 2024 Nigerian Exchange Enlarges as Investors Gain N295bn
