Nigeria's total public debt has surged to N87.38 trillion at the end of the second quarter of 2023, marking a significant 75.29% increase compared to N49.85 trillion recorded at the end of March 2023, according to the Debt Management Office (DMO). This new figure includes the N22.71 trillion Ways and Means Advances provided by the Central Bank of Nigeria to the Federal Government.
The DMO noted that the debt comprises both domestic and external debts of the Federal Government, the 36 states, and the Federal Capital Territory. The sharp increase in public debt within just three months is primarily attributed to new borrowings by the Federal Government and sub-national entities from both local and external sources.
The rising debt levels have raised concerns about Nigeria's fiscal sustainability and its ability to service these debts. The DMO had previously warned that the government's projected revenue for 2023 may not be sufficient to support further borrowing. To address this, the government needs to focus on revenue generation, implementing revenue mobilization initiatives, and reforms to increase the country's tax revenue to GDP ratio.
The depreciation of the Naira, increased domestic borrowing, and the borrowing used to pay for fuel subsidies were cited as contributing factors to the surge in public debt. The government is also urged to reduce borrowing by encouraging private sector investment in infrastructure projects and considering the privatization or sale of government assets to reduce the debt burden