Having accumulated a debt of N121.67 trillion in the first quarter of 2024, the aNigeria’s total debt stock has been projected to increase to N130 trillion by December 2024.
Afrinvest disclosed this in its recent report, titled, ‘Bank Recapitalisation, Catalyst for a $1tn Economy’.
The investment management company said its projections come amid concerns about the country’s debt-to-gross domestic product ratio.
DAILY POST reported that Nigeria’s public debt stock, which includes external and domestic debt, stood at N121.67 trillion in Q1 2024, up from N97.34 trillion in the fourth quarter of 2023.
According to the Debt Management Office, the country’s debt rise between Q1 2024 and Q1 2023 stood at 24.99 percent.
Consequently, Afrinvest estimated that the fiscal deficit, total public debt stock, debt-to-GDP, and debt-servicing-to-revenue rate would exceed N13.0tn, N130 trillion, 55 percent, and 60 percent by 2024 year-end, respectively.
Explaining the reason for the estimated debt increase, Afrivest revealed that the 2024 budget is based on ‘overly optimistic’ revenue assumptions, which could lead to a repeat of the historically disappointing budget performance.
“The expectation of a 43.9 percent share of the projected revenue from oil and other minerals is unrealistic. The share of Federal Government’s debt in total public debt stock rose 44.6 percent year-on-year to N487.3tn, accounting for 89.7 percent of total public debt stock by year-end,” the report noted.
Recall that Bola Ahmed Tinubu signed the 2024 budget of N28.7 trillion with an estimated N18.32 trillion revenue and deficit of N9.18 trillion.
Last month, the Senate approved the government’s $800 million loan request from the World Bank.
However, this is coming after Minister of Finance, Wale Edun, confirmed that the World Bank approved a $2.25 billion loan request for Nigeria in June 2024.
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