Nigeria’s total debt profile skyrocketed by N12.6 trillion in just three months to N134.3 trillion by the end of the second quarter of 2024, marking a 10.35% increase from the N121.7 trillion recorded in the first quarter ¹. This sharp rise was primarily driven by the naira devaluation, according to an official document presented at the World Bank/IMF annual meetings in Washington, DC.
– Naira Devaluation: The exchange rate devaluation led to a surge in debt stock in naira terms, despite the dollar amount remaining unchanged.
– Domestic Debt: Domestic debt soared by N5.55 trillion or 8.45%, from N65.65 trillion in Q1 2024 to N71.2 trillion in Q2.
– External Borrowing: External borrowing increased by $780 million, from $42.12 billion in Q1 to $42.9 billion by June 2024.
The Debt Management Office (DMO) clarified that while the total external debt stock remained relatively stable in dollar terms, the naira value surged due to devaluation ¹. This development has raised concerns about Nigeria’s growing debt burden and its implications for the economy.
In a related development, President Bola Tinubu’s administration has faced criticism for its borrowing spree, with some arguing that the loans acquired within the first year of his administration exceed former President Muhammadu Buhari’s Ways and Means in eight years ².
