Nigeria is facing an imminent economic challenge as its domestic debt is projected to surpass N57.5 trillion, attributed to heightened borrowings from the bond market. The Debt Management Office (DMO) reported a staggering increase of N1.80 trillion, reaching N50.2 trillion by the end of the third quarter of 2023. The recent approval for the securitization of outstanding N7.3 trillion in Ways and Means Advances further exacerbates the looming debt crisis.
Despite being Africa’s largest economy with a GDP of $477.38 billion in 2023, Nigeria continues to grapple with poverty. The World Poverty Clock highlighted that 71 million people live in extreme poverty as of 2023. The country’s total public debt stood at N87.38 trillion in the second quarter of the same year, marking a significant increase of 75.29%. This worrying trajectory is accentuated by the impending N27.5 trillion Appropriation Bill for the 2024 fiscal year, signifying that the country owes more than it earns.
The incessant rise in domestic debt coupled with persistent poverty raises pertinent questions about Nigeria’s economic stability and the well-being of its citizens. While the GDP reflects a semblance of economic strength, the stark reality of widespread poverty paints a contrasting picture. Various global indexes continue to underscore the country’s economic struggles, fueling discussions about the reasons behind Nigeria’s precarious financial situation. The increasing debt burden not only poses challenges for the government’s fiscal management but also raises concerns about the impact on the populace.
As Nigeria grapples with its escalating debt crisis, there is a pressing need for comprehensive strategies to address the underlying issues. Efforts to foster sustainable economic growth, prioritize poverty alleviation, and streamline debt management are imperative. Moreover, measures to enhance transparency and accountability in public financial management are crucial to mitigate the risks associated with the rising debt levels. Embracing prudent fiscal policies and promoting prudent borrowing practices can play a pivotal role in charting a more resilient economic path for Nigeria.
In conclusion, Nigeria’s mounting domestic debt and persistent poverty present formidable challenges that necessitate concerted efforts to safeguard the country’s economic stability and improve the well-being of its citizens. Addressing the root causes of the debt crisis and implementing effective economic reforms are essential to chart a more sustainable trajectory for Nigeria’s economy. It is imperative for policymakers, stakeholders, and the international community to collaborate in formulating and implementing holistic solutions that can pave the way for a more prosperous and financially resilient future for Nigeria.
