The Debt Management Office (DMO) has refuted recent reports suggesting that President Bola Ahmed Tinubu inherited a N21 trillion debt, clarifying that the actual figure stood at N87.38 trillion as of June 30, 2023.
In a statement released on Monday, the DMO emphasized that the total public debt includes obligations from the Federal Government of Nigeria (FGN), the 36 states, and the Federal Capital Territory (FCT). This announcement follows widespread misreporting about Nigeria’s debt trajectory.
Clarifying the Debt Numbers
The DMO addressed claims that Nigeria’s debt had ballooned to N142 trillion, labeling such reports as inaccurate. It urged the public and media outlets to rely on official data to prevent misinformation.
“The total public debt stock as of June 30, 2023, which was the first official debt figure published after President Tinubu assumed office on May 29, 2023, was N87.38 trillion, not N21 trillion as widely misreported,” the statement read.
The agency reiterated that Nigeria’s debt profile comprises both external and domestic borrowings, sourced from multilateral institutions, bilateral lenders, and local financial instruments like bonds and treasury bills.
Rising Debt Servicing Costs
Nigeria’s growing debt burden is accompanied by rising debt servicing costs, placing significant pressure on the country’s finances.
- Multilateral creditors, including the International Monetary Fund (IMF) and the World Bank, accounted for 88.2% of total debt service payments in Q3 2024.
- Bilateral lenders, such as China, made up the remaining 11.8%.
In Q3 2024, Nigeria spent $712.66 million on servicing multilateral loans, broken down as follows:
- IMF: $406.98 million
- World Bank (International Development Association): $218.77 million
- African Development Fund: $62.86 million
- African Development Bank: $14.84 million
- Islamic Development Bank: $2.67 million
These payments highlight Nigeria’s heavy debt obligations, which continue to grow amid declining revenue and rising expenditure commitments.
2025 Budget and Debt Management Efforts
The 2025 Federal Budget, currently under review by the National Assembly, earmarks N16.33 trillion for debt servicing, out of the N49.7 trillion total proposed spending. This underscores the government’s commitment to managing its financial obligations while maintaining investor confidence.
The recent successful issuance of a $2.2 billion Eurobond, which attracted over $9 billion in subscriptions, demonstrates continued trust in Nigeria’s debt instruments on the international market.
Future Debt Management Strategies
Economic analysts stress the need for Nigeria to diversify revenue sources, cut unnecessary expenditure, and implement fiscal reforms to ensure sustainable debt management. Strengthening local industries, increasing tax efficiency, and promoting foreign direct investment (FDI) will be critical to reducing reliance on debt financing.
With the government focused on long-term economic stability, effective debt management policies will play a crucial role in shaping Nigeria’s financial future.
