Nigeria’s Debt Management Office reports that Public Debt in the West African country jumped to N32.9tn at the end of December 2020.
From its last report on public debt, which was published on the DMO’s official website, public debt’s figure stood at N32.2tn as of the end of September 2020, which showed an increase of N700bn, adding that the figures include the Debt Stock of the Federal and State Governments, as well as the Federal Capital Territory.
The DMO, however, disclosed that the total public debt to the Gross Domestic Product was 21.61 per cent, adding that it was within Nigeria’s new limit of 40 per cent.
The Press Release stated that after Nigeria exited recession in 2017, the level of new borrowing at the Federal Level as shown in the Annual Appropriation Acts, had been declining to moderate the rate of growth in the public debt stock in order to ensure debt sustainability.
Also, the new borrowing to part finance budget deficits had declined steadily from N2.36tn in 2017 to N2.01tn in 2018, N1.61tn in 2019 and N1.59tn in the first 2020 Appropriation Act.
On the contrary, the trend was reversed in 2020 due to the economic and social impact of the COVID-19 pandemic as new borrowing in the revised 2020 Appropriation Act was N4.2tn.
Similarly, many advanced countries also increased their public debt as a result of the COVID-19 as it was the worst global economic crisis since the Great Depression of the 20th century which began in 1929 and lasted until the late 1930s.
The DMO also stated that apart from the new domestic borrowing of N2.3tn, other new borrowings were concessional loans from the International Monetary Fund ($3.34bn), and other multilateral and bilateral lenders.
In addition, “New domestic borrowings by state governments also contributed to the growth in the public debt stock.”
However, the various initiatives of the Government to stall public debt and to increase revenues such as the Strategic Revenue Growth Initiative and the Financial Act, 2020, should help shore up Government’s revenue and reduce the Debt Service to Revenue Ratio.