Nigerias debt rises by n9 61tn under buhari

A very timely and relevant topic!

According to recent reports, Nigeria's national debt has risen to a staggering N61.7 trillion (approximately $163 billion USD) under the administration of President Muhammadu Buhari. This represents a significant increase from the N12.1 trillion debt inherited by the Buhari administration in 2015.

The breakdown of the debt is as follows:

  1. Domestic debt: N32.2 trillion (approximately $85 billion USD)
  2. External debt: N29.5 trillion (approximately $78 billion USD)

The increase in debt is attributed to various factors, including:

  1. Increased borrowing to finance infrastructure projects, such as the Lagos-Kano rail project and the construction of new airports.
  2. Rising costs of servicing existing debt, which has led to a significant increase in debt servicing costs.
  3. Decline in oil prices, which has reduced government revenue and increased reliance on borrowing to finance expenditure.
  4. Inflation, which has eroded the value of the naira and increased the cost of borrowing.

The rising debt has raised concerns about the sustainability of Nigeria's debt profile and the potential risks it poses to the country's economy. Some of the concerns include:

  1. Debt servicing costs: The increasing debt servicing costs could divert funds away from other important sectors, such as education and healthcare.
  2. Risk of debt crisis: If the debt continues to rise unchecked, it could lead to a debt crisis, which could have severe consequences for the economy and the country's credit rating.
  3. Impact on foreign investment: The rising debt could deter foreign investors, who may be concerned about the country's ability to service its debt.

To address these concerns, the Nigerian government has announced plans to implement measures to reduce debt and improve fiscal discipline, including:

  1. Increasing revenue through tax reforms and improved tax collection.
  2. Reducing expenditure through cost-cutting measures and prioritization of essential spending.
  3. Improving the efficiency of government spending and reducing waste.
  4. Increasing the use of alternative sources of funding, such as sukuk (Islamic bonds) and green bonds.

It is essential for the Nigerian government to take concrete steps to address the rising debt and ensure that it is managed sustainably to avoid any potential risks to the economy.