Nigeria’s total debt (Federal Government and states’ loans) may hit at least N107.38tn soon following the approval of fresh borrowings for the Federal Government and new securitisation of the Central Bank of Nigeria’s N7.3tn Ways and Means advances.

This is as the Senate, as of December 2023, approved President Bola Tinubu’s request to borrow $7.8bn and €100m as part of the Federal Government’s 2022-2024 borrowing plan. According to Tinubu, the Federal Executive Council under former President Muhammadu Buhari approved the loan facility on May 15, 2023, to finance infrastructure, health, education, agriculture, insecurity, and other sectors.

While asking for the approval, he the foreign loan was necessary to bridge the financial gap and return normalcy to economic activities in the country.

In a letter to the senate in November 2023, the president said, “The senate is invited to note that following the removal of fuel subsidy and its impact on the economy in the country, African Development Bank and the World Bank Group have indicated interest to assist the country in mitigating the economic shores and recent reforms with a sum of $1bn and $2bn respectively.


“In addition to the Federal Executive Council approved 2022-2024 external borrowing plan. Consequently, the required approval is 7,864,508,559 dollars and in terms of euros, 1000 million euros.

“I would like to underscore the fact that the projects and programmes borrowing plans were selected based on positive technical economic evaluations as well as the expected contribution to the social economic development of the country, including employment generation, skills acquisitions, supporting the emergence of more enterprenuers, poverty reduction, and food security to improve the livelihood of an average Nigerian.”

He added, “Given the nature of these facilities and the need to consolidate the country to normalcy, it has become exigent to request the senate consideration and approval of the 2022- 2024 external borrowing plans to enable the government to deliver its responsibilities to Nigerians through expeditious disbursement and efficient projects implementation.”


Nigeria’s total debt as of the end of September 2023 was N87.91tn, according to data from the Debt Management Office. The breakdown of this debt revealed total external debt as N31.98tn ($41.59bn) and total domestic debt of N55.93tn.

The total debt includes that of the Federal Government and state governments. Following the recent approvals by the senate, total debt will climb up by at least 22.15 per cent (N19.47tn) to N107.38tn in 2024 if the borrowing plan is followed to the letter.

The component of total debt, if the plan is followed, will include foreign debt of N44.15tn ($49.39bn converted at N891.9/$ and €100m converted at N969.92/€) and domestic debt of N63.23tn (old domestic debt of N55.93tn with new securitised Ways and Means of N7.3tn).

Between January 2022 and September 2023, the Federal Government grew its foreign loan profile by $3.20bn from $38.39bn to $41.59bn. It is unclear whether this is part of the 2022-2024 borrowing plan.

The PUNCH did not use a higher exchange rate like that of Friday, 2, 2024 when the naira closed at N1435.53/$ because of the optimism around the CBN’s latest move to stabilise the foreign exchange rate. The naira is expected to appreciate N900/$ in certain corners.

Raising total debt to N107.38tn will translate to 53.06 percent of the country’s 2022 GDP value of N202.37tn. The country has a targeted 40 percent debt to GDP ratio. The Medium-Term Expenditure Framework and Fiscal Strategy Paper 2024-2026 recently revealed that the country’s Total Public Debt/GDP was 41.15 percent as of June 2023.

Ways and Means is a provision that allows the government to borrow from the CBN if it needs short-term or emergency finance to fund deficit gaps. It typically is not added to the total loan profile of the country until it is securitised.

In May 2023, the National Assembly approved the securitisation of N22.7tn from the N23.3tn previously advanced by the CBN. This led to a substantial increase in the country’s total public debt profile.

The debt was transferred to the DMO with a 40-year tenor, a 3-year moratorium, and an interest rate of 9 percent. When it released its total debt profile for the second quarter of 2023, DMO said, “Nigeria’s total public debt stock as of June 30, 2023, was N87.38tn ($113.42bn). It comprises the total domestic and external debts of the Federal Government of Nigeria, the thirty-six states, and the Federal Capital Territory.

“The major addition to the Public Debt Stock was the inclusion of the N22.712tn securitized FGN’s Ways and Means Advances.”

It is important to note that the projected borrowing has not yet been secured and may take a while according to analysts conversant with government borrowings.

One analyst, who didn’t want his name in print, said, “It will take a while for the projection to happen. Some loans were approved in 2020, but we have not gotten the full amount. One of the loans, we have only received about 15 percent since 2020.”

Total public debt is also expected to grow by at least N7.83tn in 2024 based on the Federal Government’s budget projection for the year.

Recently, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, disclosed that the country is seeking $1.5bn from the World Bank.

He said to Bloomberg recently, “We’re hoping to get $1bn or $1.5bn from the World Bank for budgetary support.”

He also hinted that the country might issue a Eurobond in late 2024. He noted, “It is a matter of discussion at the moment, but we think we will get the support because we are continuing with our reforms.”

In October 2023, the Federal Government disclosed that it secured a budget support loan worth $1.5bn from the World Bank and another worth $80m from the African Development Bank.


Edun stated that the government would receive the $1.5bn before the end of 2023, provided it fulfilled its end of the deal.

He said, “The total is $1.5bn. The world today has one of the highest interest rates as the developed world looks to fight inflation. They do it by restricting money, and keeping interest rates high so that you can get inflation down.

“That means that interest rates for everybody else become not just high but very painful, if not unaffordable within that context.”

Edun has been quite vocal against loans, stating that to stabilise the economy the country would need to rely less on borrowing.

During the 2024 Budget presentation in 2023, he said, “The breakdown of different elements shows the direction of this administration in order to stabilise the Nigerian economy for rapid inclusive growth. There is going to be less reliance on borrowing.

“The budget deficit is being brought down to about from 6.1 percent to 3.8 percent of GDP. That is a huge change in direction from unlimited borrowing to focusing on revenue and expenditure management. There will be value for money on expenditure and increased revenue. The key target is to increase tax to GDP ratio from under 10 percent to 18 percent in a couple of years. That target, a hugely ambitious one is what we need to meet to reduce reliance on borrowings.”

Before this, Edun, while unveiling an eight-point agenda for the economy, said, “The government is not in a position to borrow if you consider 90 percent debt service to revenue, and behind that, a rising debt to GDP ratio. If you look at the last budget, you will see a borrowing requirement built into it and appropriated by the National Assembly. And that is ongoing.”

Recently, the Director-General of the Debt Management Office, Patience Oniha, noted high inflation rates have impacted how the country can enter the foreign market.

Speaking on the sidelines of the discussions for the establishment of the African Debt Managers Initiative Network spearheaded by the African Development Institute of the African Development Bank, she said, “There is still uncertainty around the world from the Russia-Ukraine war. So foreign investors are a bit more cautious.

“Let’s use the word, risk-averse and they are investing in those securities that are triple A or double A rating that are offering them high rates, four percent, five percent.”

The country’s rising debt profile has led to an increase in the cost of debt servicing over the years. The World Bank recently projected that debt servicing may gulp 123.4 percent of the Federal Government’s revenue in 2023.

Between January and July 2023, the Federal Government spent 75.92 percent of its aggregate revenue on debt servicing.


Nigeria is still reliant on Ways and Means financing, the World Bank recently stated. It said Federal budgets are prepared based on overly optimistic revenue projections that are often not realised during the year, causing financing gaps to emerge as actual fiscal deficits exceed budgeted fiscal deficits.

In its Nigeria Development Update for December 2023, the global bank declared, “Consequently, the FGN resorts to using Ways and Means financing—a quicker source of financing and one that is not officially accounted for as part of the FGN’s debt stock.”

In its 2024 outlook, the Nigerian Economic Summit Group disclosed that the government is still overly reliant on foreign debt to finance its budget deficit.

It said, “Currently, the Nigerian government is contending with a growing budget deficit, estimated at 85.4 percent of government revenue as of 2022 — surpassing the benchmark figure of 3.0 percent of GDP stipulated in the Fiscal Responsibility Act (FRA) 2007, owing to historical underperformance in revenue.

“The reliance on foreign debt to finance the budget deficit, exacerbated by the private sector crowd-out effects of domestic borrowing, has contributed to the escalation of the general price level and the depreciation of the exchange rate.”

The group noted that with an anticipated surge in government revenue due to substantial savings from removing fuel subsidies, the exchange rate devaluation, the expected rise in crude oil prices, and an improvement in crude oil production in 2024, the country will continue to fulfill its debt obligations.

In a document titled, ‘2024: The Hard Road Ahead,’ the Chief Executive Officer, Financial Derivatives Company Ltd., Bismarck Rewane, highlighted that Nigeria’s debt is becoming unsustainable and the country’s debt burden will be further worsened by high-interest rates in 2024.

He said, “Nigeria’s debt is becoming unsustainable. Nigeria serviced its debt with 99 percent of its revenue in H1’23. Nigeria’s debt burden will be exacerbated by high-interest rates in 2024. Efficient use of borrowed funds is crucial for its debt sustainability. The federal government must spend on productive sectors to boost revenue sources.”

He noted that a one percent increase in public debt will have a 16.7 percent negative effect on GDP and that if public debt increases to $114.3bn, real GDP growth will fall to 2.12 percent.

He added, “High debt burden but Nigeria is likely to withstand the shock.”



Contact: theeditor@punchng.com

Tinubu has come to worsen the situation, his foolish supporters are singing his praises