It is no longer news Nigeria has a huge debt burden. What is worrisome is the rate at which it increases yearly.
Since 2015, Nigeria’s debt burden has jumped by 213 percent; from N12.6 trillion in December 2015 to N39.5 trillion in December 2021.
In 2021 alone, Nigeria borrowed N6.6 trillion raising more question on how the accumulated debt can be repaid amid a dwindling revenue.
According to the Debt Management Office (DMO), Nigeria’s external debt now stands at N15.85 trillion while domestic debt is at N23.70 trillion.
The federal government accounts for N33.24 trillion which is 84 percent of the total debt while States and the Federal Capital Territory (FCT) are owing N6.4 trillion.
How long it will take Nigeria to repay
Nigeria’s economy is a resource dependent country and crude oil sales is important to how much can be committed to servicing debts.
Although Nigeria has yet to announce a single default on its debt repayment obligations, the burden of servicing the debt is evident for all to see.
Zainab Ahmed, the Minister of Finance In her Budget presentation disclosed that from January to November of 2021, the Federal government made N970.33 billion from oil.
This is Just 17.61 percent of the aggregate revenue N5.50 trillion revenue.
The presentation also showed that out of the total revenue, N4.20 trillion was removed to pay debt.
This indicates that Nigeria’s oil revenue is being swallowed completely by debt service.
With debt presently standing at N39.5 trillion and oil earnings hovering around N1 trillion, it will take the government 39 years to fully service its debts, assuming it does not take on further debt.
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