Nigeria’s public debt rose to N32.92tn ($86.39bn) in the fourth quarter of 2020, representing a 2.15 per cent increase from N32.22tn recorded in Q3.
According to the debt profile report released by the Debt Management Office (DMO), in the period under review, Federal Government’s domestic debt profile increased by 1.12 per cent from $41.59bn in Q3 2020 to $42.06bn, while states’ domestic debt declined by 0.1 per cent to stand at $10.99bn.
Nigeria’s external debt stock increased by 4.26 per cent from $31.99bn recorded in the previous quarter to $33.35bn in Q4.
Despite the increase in public debt stock, Nigeria seems to be keen on borrowing more to fund its budget and other projects.
Addressing stakeholders and the media on the 2021 budget, the Minister of Finance, Budget and National Planning, Dr. Zainab Ahmed, noted the overall budget deficit for 2021 as N5.6tn, representing 3.93 per cent of the Gross Domestic Product.
She stated that the budget deficit would be financed mainly by borrowings, domestic and foreign, suggesting that the country’s debt profile is likely to rise in the coming quarter.
With crude oil’s recent bearish performance, Nigeria faces uncertainty in generating much foreign exchange from oil export to adequately meet up with its pent-up obligations from the downturn experienced during the lockdown occasioned by the Coronavirus Disease.
It is noteworthy that the aggregate revenue available to fund the 2021 approved budget is projected at N7.99tn, with 30 per cent expected from oil-related sources and 70 per cent from non-oil sources.
The major concern for the Nigerian economy is that the country obtains loans from domestic and external sources, only to spend a large chunk of it in servicing the same loans. The 2021 budget allocates N3.32tn to debt service, representing 24.5 per cent of the budgeted expenditure.
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