Nigeria’s ₦121.67tr Debt Normal, Within Limit – DMO

The Debt Management Office (DMO), has insisted that Nigeria’s staggering public debt profile is okay and very much within reasonable limits.

This was made known on Tuesday by the Director-General of DMO, Patience Oniha, during a chat with newsmen in Abuja.

There had been concerns after the DMO last week revealed that Nigeria’s total public debt has surged to a staggering ₦121.67 trillion as of March 31, 2024, marking a significant rise of ₦24.33 trillion or 24.99 percent in just three months.

This sharp increase from the December 2023 figure of ₦97.34 trillion has raised concerns over the country’s fiscal sustainability.

However, Oniha explained on Tuesday that the sharp increase is due partly to exchange rate fluctuations and should not cause any agitation among the concerned members of the public.

She said that the securitisation of N4.90 trillion as part of the securitisation of the N7.3 trillion Ways and Means Advances approved by the National Assembly was also responsible for the N24.33 trillion increase in the debt stock.

Also included in the current debt profile, is the interest rate and new borrowing of N2.81 trillion as part of the N6.06 trillion provided in the 2024 budget.

Additionally, the DMO boss said the debt stock included the domestic and external debt stock of the thirty-six states and the Federal Capital Territory (FCT).

“The total public debt as at March 31, showed that the total public debt in Naira terms stood at N121.67 trillion compared to N97.34 trillion as at December 31, 2023.

“While detailed information was provided on the data such as the split between external and domestic debt as well as the fact that the debt stock includes the domestic and external debt stock of the 36 states and the FCT, it has become imperative to provide some explanations.

“It is important to recognise the fact that Nigeria has undergone some major reforms which have impacted economic indices such as the dollar/Naira exchange rate and interest rates.

“These two, in particular affect the debt stock and debt service,” she said.

Oniha, who insisted that the debt report is an improvement from the past by the Bola Tinubu government, said the increase in Naira Terms of N24.33 trillion between the fourth quarter of 2023, and first quarter of 2024, did not strictly represent new borrowing.

According to her, the total external debt stock was relatively flat at 42.50 billion dollars and 42.12 billion dollars in the fourth quarter of 2023, and first quarter of 2024 respectively.

“The Naira values were significantly different at N38.22 trillion and N56.02 trillion, respectively, representing a difference of N17.8 trillion.

“This explains the perceived sharp increase of N24.33 trillion in the total debt stock in the first quarter of 2024.

“The difference in the exchange rate for the two periods also explains why, in dollar terms, the total debt stock actually declined in the first quarter of 2024 to 91.46 billion dollars,” Oniha said.