The Debt Management Office (DMO) has revealed that Nigeria’s total public debt stock reached N49.95 trillion (108.30 billion dollars) as of March. This figure includes the combined external and domestic debts of the federal government, the 36 states, and the Federal Capital Territory (FCT). In just a few months, Nigeria’s debt has risen by approximately N3 trillion, signifying a pressing need to address the nation’s financial situation. The DMO recently released the Market Access Country-Debt Sustainability Analysis (MAC-DSA), underlining the necessity for increased revenues to ensure sustainable debt management.
Nigeria’s total debt, which stood at N46.25 trillion (103 billion dollars) in December 2022, has seen a substantial increase. This upward trajectory is of concern and demands immediate attention from stakeholders involved in the nation’s economic planning. Notably, the current debt stock does not encompass the N22.719 trillion Ways and Means Advances provided by the Central Bank of Nigeria (CBN). However, the National Assembly approved the securitization of these advances in May, meaning that they will be included in the federal government’s debt stock from June onwards.
To ensure transparency and adherence to best practices in public debt management, the DMO adopted the Market Access Country-Debt Sustainability Analysis (MAC-DSA), a tool developed by the World Bank and IMF. The MAC-DSA report, which is published annually, involves collaboration with key federal government agencies such as the CBN, Budget Office of the Federation, Office of the Accountant General of the Federation (OAGF), National Bureau of Statistics (NBS), and the Federal Ministry of Finance, Budget, and National Planning.
Director-General of the DMO, Patience Oniha, emphasized the crucial role of generating more revenues to ensure the sustainability of Nigeria’s public debt. The recently released DSA report for 2022 reiterated the need for the government to prioritize revenue growth. Oniha commended certain policies implemented by the present administration that are expected to enhance debt sustainability, including the removal of subsidies to manage expenditure and the appointment of a Special Adviser to the President on Revenue. These measures demonstrate a commitment to addressing the nation’s financial challenges.
As Nigeria’s public debt continues to escalate, urgent measures must be taken to bolster the country’s revenue generation capabilities. The DMO’s Market Access Country-Debt Sustainability Analysis (MAC-DSA) provides valuable insights into the nation’s debt situation and serves as a framework for effective debt management. By implementing policies that promote revenue growth and address expenditure management, the Nigerian government can strive towards sustainable debt levels. It is imperative for all relevant stakeholders to collaborate in ensuring the economic stability and growth of the nation.