Nigeria’s Total Debt Stock rose to N97.34 trillion in Q4 of 2023 

The Debt Management Office (DMO) has disclosed in its latest debt report that Nigeria’s total debt stock surged by 10.72 percent from N87.91 trillion in Q3 2023 to N97.34 trillion in Q4 2023. This represents a 110 percent increase (N51.09 trillion) from N46.25 trillion reported in Q4 2022. The rise in debt is primarily attributed to new borrowings by both federal and state governments to cover the 2023 budget deficit and settle maturing debts.

Domestic debt constituted 60.74 percent (N59.12 trillion) of the total debt, while foreign debt made up 39.26 percent (N38.21 trillion), aligning with the government’s debt management strategy. During the quarter, both domestic and foreign debts saw an uptick – domestic debt increased by N3.19 trillion and foreign debt by N7.28 trillion.

Although it may seem like Nigeria relied more on foreign sources, the increase is largely influenced by exchange rate fluctuations. The continuous growth in Nigeria’s debt level can be attributed to budget deficits, naira devaluation, high interest payments, and low revenues, among other factors.

It is crucial for the government to reassess its debt management practices and framework to ensure that borrowing is done prudently and that borrowed funds are utilized effectively. Moreover, enhancing Nigeria’s domestic revenue generation capacity through enhanced tax administration, enforcement, and compliance mechanisms can help reduce the necessity for excessive borrowing.