Nigeria’s total debt stock is projected to rise to N130 trillion by the end of December 2024, up from N121.67 trillion recorded in the first quarter of the year, according to a recent report by Afrinvest titled ‘Bank Recapitalisation, Catalyst for a $1tn Economy’.
The report raises concerns over the country’s rising debt-to-gross domestic product (GDP) ratio.
Nigeria’s public debt, which includes both external and domestic obligations, increased from N97.34 trillion in the fourth quarter of 2023 to N121.67 trillion in Q1 2024, marking a 24.99 percent rise over the year.
Afrinvest forecasts that by the end of 2024, the country’s fiscal deficit, total public debt stock, debt-to-GDP ratio, and debt-servicing-to-revenue rate will exceed N13.0 trillion, N130 trillion, 55 percent, and 60 percent, respectively.
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The report attributes the anticipated debt increase to what it describes as “overly optimistic” revenue assumptions in the 2024 budget, which could result in another year of underperformance.
The report also highlighted the unrealistic expectation of generating 43.9 percent of projected revenue from oil and other minerals, and noted that the Federal Government’s share of total public debt stock rose by 44.6 percent year-on-year to N487.3 trillion, accounting for 89.7 percent of the total public debt stock by the end of the year.
In December 2023, President Bola Ahmed Tinubu signed a N28.7 trillion budget for 2024, with an estimated revenue of N18.32 trillion and a deficit of N9.18 trillion.
Last month, the Senate approved an $800 million loan request from the World Bank, following a previous $2.25 billion loan approval by the World Bank in June 2024.