A forecast predicts that Nigeria’s total debt will rise to N130 trillion by the end of December this year, up from N121.67 trillion in the first quarter of 2024, according to Afrinvest’s recent report titled ‘Bank Recapitalisation, Catalyst for a $1tn Economy’.
The investment management firm highlighted concerns about the country’s debt-to-gross domestic product ratio in its analysis.
Nigeria’s public debt, which comprises external and domestic debt, was recorded at N121.67 trillion in Q1 2024, a significant increase from N97.34 trillion in the previous quarter of 2023, as reported by NewsNow.
The Debt Management Office data shows a 24.99% rise in the country’s debt between Q1 2024 and Q1 2023.
Afrinvest projects that by the end of 2024, the fiscal deficit, total public debt stock, debt-to-GDP ratio, and debt-servicing-to-revenue rate would surpass N13.0tn, N130 trillion, 55%, and 60% respectively.
The company attributes the estimated debt escalation to the 2024 budget’s reliance on ‘overly optimistic’ revenue assumptions, which could result in a repeat of past disappointing budget performances.
“The expectation of a 43.9% revenue share from oil and other minerals is deemed unrealistic,” Afrinvest stated.
“The Federal Government’s share of total public debt rose by 44.6% year-on-year to N487.3tn, representing 89.7% of the total public debt by the end of the year,” the report highlighted.
It is worth mentioning that President Bola Ahmed Tinubu signed a N28.7 trillion budget for 2024, with projected revenue of N18.32 trillion and a deficit of N9.18 trillion.
Recently, the Senate approved an $800 million loan request from the World Bank, following Finance Minister Wale Edun’s confirmation of the World Bank’s approval of a $2.25 billion loan request for Nigeria in June 2024.