A recent report from the Debt Management Office (DMO) has raised concerns about a potential debt crisis in Nigeria, with the country’s external debt expected to reach $45.1 billion by the end of 2024. The report indicates that Nigeria’s external debt stock increased by $780 million in the second quarter of 2024, growing from $42.12 billion in March to $42.9 billion by June 2024.
To address this growing debt burden, the Federal Government has approved a new external borrowing plan of $2.2 billion as part of the 2024 Appropriation Act financing programme. This plan includes Eurobond and Sukuk offerings valued at $1.7 billion and $500 million, respectively.
Minister of Finance, Wale Edun, emphasized that Nigeria’s ability to access the international capital market reflects support for President Bola Ahmed Tinubu’s economic reforms. However, concerns have been raised about the rising debt profile, particularly as Nigeria spent $3.58 billion servicing its foreign debt in the first nine months of 2024, a significant increase from the previous year.
Muda Yusuf, Director of the Centre for the Promotion of Private Enterprise (CPPE), expressed worries about the country’s increasing debt burden, highlighting insufficient revenue capacity and ongoing infrastructural deficits as major concerns. The rising debt levels could pose a significant challenge to Nigeria’s economic stability in the coming years.
