Nigeria’s public debt stock is expected to reach N130 trillion by the end of this year, according to a recent report by Afrinvest titled Bank Recapitalisation, Catalyst for a $1tn Economy. This increase raises significant concerns about the country’s debt-to-GDP ratio and overall fiscal health.
As of Q1 2024, Nigeria’s debt stock was N121.67 trillion, up from N97.34 trillion in Q4 2023. The current debt comprises N77.5 trillion in domestic debt and N44.2 trillion in external debt. Afrinvest’s report also highlights concerns about the 2024 budget’s revenue projections, which it deems overly optimistic, potentially leading to another disappointing fiscal performance.
The report criticizes the Federal Government’s expansive borrowing plans, suggesting that they could negatively impact bank deposits and increase risks for financial institutions. Afrinvest also commended recent Central Bank of Nigeria measures to streamline Bureau De Change operations but warned of persistent forex market challenges, recommending alternative sources of foreign exchange to stabilize the market.