Nigeria’s debt to GDP ratio rises to 55% as of June 2024, as FG prepares fresh N9 trillion debt 

This is based on data from the Debt Management Office, which indicates that Nigeria’s external debt now stands at $42.9 billion, while its domestic debt has risen to N71.2 trillion.

Nigeria’s public debt has increased this year due to a combination of factors, including exchange rate depreciation and a rise in domestic borrowing, often at higher interest rates.

Naijaonpoint earlier reported that the debt-to-GDP ratio crossed 50% for the first time at the end of March 2024, following the release of updated GDP figures.

The debt-to-GDP ratio is a critical metric for sub-Saharan African countries, as it measures fiscal sustainability, influences access to affordable financing, and impacts public investment capacity.

Using the exchange rate of N1,505/$1 as of June 30th, 2024, the total public debt becomes N135.6 trillion.

Nigeria’s debt-to-GDP ratio has historically been viewed as one of the lowest in sub-Saharan Africa, with the debt service-to-revenue ratio often identified as the primary challenge.

While these countries have significantly higher debt-to-GDP ratios compared to Nigeria, the key challenge for Nigeria remains its ability to meet debt service obligations due to its high debt service-to-revenue ratio.

Naijaonpoint earlier reported that the country’s total debt service payments surged by 39.77% from $2.56 billion between January and September 2023 to $3.58 billion in the same period of 2024, highlighting the growing financial strain on public resources.

Debt servicing accounted for 73.97% of total foreign payments of $757.41 million for the month. The federal government recently announced it is proposing a budget of N47.9 trillion in line with its medium-term expenditure framework.

The budget will be backed by fresh N9.2 trillion in new borrowing which will be used to finance the budget deficit in 2025.