Nigeria’s total public debt is set to rise significantly in 2024 and likely exceed N107 trillion ($140 billion), driven by fresh government borrowings and the depreciation of the naira currency.
In December 2023, the Senate approved President Bola Tinubu’s request to borrow $7.8 billion and 100 million euros over 2022–2024 to finance infrastructure, health, education, and other key sectors. Tinubu stated the loans would help bridge the fiscal gap and restore economic stability amid subsidy removal impacts.
Nigeria’s debt as of September 2023 stood at N87.9 trillion, comprising N32 trillion in external debt and N55.9 trillion in domestic debt. With the recent Senate loan approvals, total debt could climb over 22% to above N107 trillion. This equals 53% of Nigeria’s estimated 2022 GDP, exceeding the 40% debt-to-GDP ratio target.
The government is also securitizing N7.3 trillion of Central Bank of Nigeria (CBN) Ways and Means advances. Additionally, Nigeria seeks $1.5 billion in World Bank budget support and may issue a Eurobond in late 2024, per Finance Minister Wale Edun.
Rising debt servicing costs consumed 75.92% of federal revenues in January–July 2023. The World Bank projects 2023 debt servicing could reach 123.4% of government revenue given high inflation and interest rates.
Experts warn Nigeria’s debt trajectory is unsustainable. The government remains reliant on foreign borrowing to plug its fiscal deficit rather than boosting domestic revenue mobilization. Urgency is required to channel loans to productive sectors that can spur growth and revenues.
With prudent fiscal reforms, Nigeria could withstand debt pressures in 2024. But continued unproductive borrowing risks further hampering GDP growth and currency stability amid global uncertainty. Political will is essential to curb debt appetite and reinforce financial sustainability.