Nigeria has added N6 trillion to its public debt and is set to add more.
Will Nigeria ever be debt free?
According to the Nigerian Domestic and Foreign Debt report, recently released by the National Bureau of Statistics (NBS), Nigeria’s total public debt increased by over N6 trillion in just one year.
The total public debt, made up of external and domestic debt, incurred by Nigeria stood at N32.22 trillion ($84.57 billion) as of September 2020. This represents a N6.01 trillion increase when compared to N26.21 trillion recorded as of the corresponding period of 2019.
Here is a breakdown of the total debt:
- Further disaggregation of Nigeria’s foreign debt showed that $16.74bn of the debt was multilateral.
- Also, $502.38m was bilateral (AFD) and another $3.26bn bilateral from the Exim Bank of China, JICA, India, and KFW while $11.17bn was commercial which are Eurobonds and Diaspora Bonds.
- Total external debt grew by $5.04 billion (N3.9 trillion), an 18.72% increase within the period.
- Total domestic debt on the other hand declined by $5.86 billion. However, it represents an increase in Naira value of N2.09 trillion, largely due to multiple devaluations of the Naira during this period.
This breakdown shows that external debts accounted for 37.82% (N12.19 trillion) and domestic debts for 62.18% (N20.04 trillion) of the total debt.
And just so you know, this does not end the debt trend in Nigeria as there are indications that more loans would be taken this year by the government.
Why would the government do that? You might be wondering.
Let us put this into perspective.
On the 31st of December 2020, President Buhari (the president of Federal Republic of Nigeria) signed the 2021 appropriation bill of N13.59 trillion into law, which is 25.7% higher than the revised 2020 budget of N10.8 trillion. However, the budget comes with a deficit of N5.6 trillion, which is expected to be financed mainly through borrowings both externally and domestically.