Nigeria’s Debt Profile Crosses ₦97 Trillion — What This Means for You.

 Nigeria’s Debt Profile Crosses ₦97 Trillion — What This Means for You.

The amount of the national public debt of Nigeria portrayed by the Debt Management Office (DMO) has risen to 97.34 trillion. This astronomical figure covers both the borrowings by the Federal and the State Governments, and these tough questions are asked concerning the fiscal responsibility and economic growth, and burden to be borne by Nigerians in the long run.

“The current debt trajectory is unsustainable. Nigeria must prioritize revenue generation, block leakages, and cut wasteful spending,”

— Patience Oniha, DG, Debt Management Office. Source: Punch NG

Here are the Breakdown:

The latest amount of debt includes:

Domestic Debt: 59.12 trillion

External Debt: 38.22 trillion

Over 20 percent increase in debt stock was actually recorded within a period of one year and this was as a result of Flotations in the exchange rates,New borrowings to fund deficits in the national budget,Infrastructure and recurrent borrowings by states.

 What This Implies to the Common Nigerians :

More Taxes to Come: Government can increase its taxation to cover the repayment deficit,Dilution of Public Services: Health, education and infrastructural budgets are chomped up by debt servicing,Chronic inflation.

 with increased borrowing there is an increased tendency to print money which causes inflation and devaluation of the currency.

These are important Points of Note to Watch : The ratio of debt to GDP is currently in a range of 45% which even though below the 70% limit set by World Bank, it is still very worrying to an economy that has low productivity.

The increase in the amount of revenue that is used in servicing the debts means that the amount of revenue available to finance development is almost nil.

Deeper Implications:

It is not only a government problem, it is a problem of yours as well. It influences The bank interest charge on loans writing on yours,How much naira you will have and The cost of the commodities in your locality.

At this level of debts, there is a risk that the future governments would face an economy with little expansion potential. And unless there are good investments in revenue instigating areas of its economy, debt will continue to skyrocket.

The debt profile of Nigeria has turned out to be a time bomb. On the one hand, one has to borrow sometimes, but borrowing without definite productive schemes of repayment is dangerous. Transparency and accountability are what the people of Nigeria ought to insist on-because tomorrow what they are borrowing today and which has created this mess becomes their problem to pay.