…If left uncontrolled, Nigeria’s public debt may exceed 100% of global GDP by 2030 – IMF
The International Monetary Fund (IMF) and financial analysts have expressed worry over Nigeria’s increasing public debt, which currently stands at $94.23 billion or N144.67 trillion as of December 2024, iNews Times reports.
Despite growing fiscal pressures and a precarious economic outlook, Nigeria’s President, Bola Tinubu plans to increase external borrowing efforts.
Tinubu has requested approval of a $21.5 billion loan from the National Assembly, part of a larger borrowing plan for 2025-2026 aimed at bridging funding shortfalls and spurring economic growth.
Additional borrowing plans include €2.2 billion ($2.5 billion), ¥15 billion ($104 million), and $2 billion domestically, totaling approximately $26 billion in fresh loan plans.
Cowry Research warned that around 60% of the anticipated spending will be covered through new borrowings, marking a concerning shift from earlier promises to reduce dependence on debt.
Analysts cautioned that a large portion of the funds will likely finance recurring and capital expenditures with limited impact on generating long-term sustainable revenue.
The IMF warned that if left uncontrolled, public debt may exceed 100% of global GDP by 2030, with debt already increasing rapidly in public economies accounting for 80% of global GDP.
The IMF advised countries to reduce public debt, rebuild fiscal buffers, and implement credible medium-term plans.
The iNews Times reports that Nigeria’s debt profile increased to N144.6 trillion at the end of 2024 from N97.3 trillion the year before, according to the Debt Management Office.
However, the decline in dollar terms was mainly due to the devaluation of the Naira rather than actual repayments.
The IMF stressed the importance of macroeconomic stability and targeted growth policies, stating that governments need to build trust, tax fairly, and spend wisely.
Cowry Research highlighted the discrepancy between Nigeria’s stagnating revenue growth and rising debt servicing costs, exposing the country to external shocks due to its overdependence on oil revenues.
