Rising borrowing costs and naira depreciation will drive Nigeria’s debt to ₦187.79 trillion by 2025.
A report from Cardinalstone forecasts the debt will reach ₦153.04 trillion by the end of 2024, sparking concerns over financial stability.
Nigeria’s debt is rapidly increasing, with projections indicating it will reach ₦187.79 trillion by 2025.
Cardinalstone, an investment firm, reports that high borrowing costs, naira depreciation, and the government’s return to the Eurobond market, where it raised $2.2 billion, are driving the rise in debt.
By the end of 2024, Nigeria’s debt is set to total ₦153.04 trillion.
The government has contributed significantly to this surge, with foreign debt reaching ₦63 trillion ($43 billion) by mid-2024.
The Federal Government holds ₦56 trillion of this debt, while state governments owe ₦7 trillion.
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Domestic borrowing has also increased, now accounting for 53 per cent of the total debt stock.
Although, the government has tried to cap the public debt-to-GDP ratio at 40 per cent, Nigeria’s debt-to-GDP ratio surpassed 50 per cent and will rise to 58 per cent by mid-2024.
Analysts warn that weak revenue generation and ongoing foreign exchange volatility could push debt levels even higher, further straining the economy.
The government is also facing a significant burden from debt servicing.
In the first half of 2024, debt servicing surged by 69 per cent, reaching ₦6 trillion and consuming 50 per cent of government spending.
As Eurobond maturities average $1.33 billion annually, concerns are growing about the long-term sustainability of Nigeria’s debt and the economic strain it will cause.
