The Debt Management Office (DMO) has revealed that Nigeria’s total public debt rose by 75.29 per cent to N87.38 trillion in the second quarter of 2023.
It surpassed the projection of DMO’s Director-General, Patience Oniha, who had predicted the debt could hit N70 trillion, excluding N5 trillion in new borrowings and promissory notes of N2 trillion.
According to the Q2 report covering April to June and obtained on Friday, DMO said the total public debt increased by N37.53 trillion from N49.85 trillion in Q1 2023.
The ways and advances from the Central Bank of Nigeria (CBN) and new borrowings contributed to the significant increase.
“Nigeria’s total public debt stock as at June 30, 2023, was N87.38tn ($113.42bn). It comprises the total domestic and external debts of the Federal Government of Nigeria, the thirty-six states, and the Federal Capital Territory.
“The major addition to the Public Debt Stock was the inclusion of the N22.712 trillion securitized FGN’s Ways and Means Advances,” the report reads.
The naira devaluation also influenced the increase, as DMO said: “Central Bank of Nigeria (CBN) Official Exchange Rate of US$1 to N770.38 as at June 30, 2023, was used in converting External Debt to Naira.”
Recall that the debt office said it was going to add the ways and means advances – which closed 2022 at N22.71 trillion – to the total debt for the period ending June 2023.
“The securitization of the FGN Ways and Means Advances after receipt of requisite approvals, has enabled its inclusion in the Total Public Debt Stock,” DMO said.
It also stated that: “This development, which was welcomed by development partners amongst others, has improved debt transparency and led to the reduction in Debt Service costs associated with the Ways and Means Advances.
“Other additions to the Debt Stock were New Borrowings by the FGN and the subnationals from local and external sources.
“The reforms already introduced by the present administration and those that may emerge from the recommendations of the Fiscal Reform and Tax Policies Committee, are expected to impact debt strategy and improve debt sustainability.”