Debt Management Office (DMO) says Nigeria’s total public debt stock climbed to N39.556 trillion in 2021 against N32.915 trillion in the previous year.

Patience Oniha, director-general of DMO, said this on Thursday at a media briefing in Abuja.

Oniha said the total debt includes new borrowings by the federal government and the sub-nationals.

She added that the amount helped in financing the budget deficit, capital projects and support economic recovery.

“Nigeria’s total public debt as at December 31, 2021, was N39.556 trillion or $95.779 billion. The amount represents the total external and domestic debts of the Federal Government of Nigeria (FGN), 36 state governments and the federal capital territory,” Oniha said.

“The comparable figure for December 31, 2020, was N32.915 trillion or $86.392 billion. The public debt stock for December 31, 2021, includes new borrowings by the FGN and the sub-nationals. For the FGN, it would be recalled that the 2021 appropriation and supplementary acts, included total new borrowings (from domestic and external sources) of N5.489 trillion to part-finance the deficit.

“Borrowings for this purpose and disbursements by the multilateral and bilateral creditors account for a significant portion of the increase in the debt stock. Increases were also recorded in the debt stock of the states and the FCT.”

She said that despite the debt increase, Nigeria is still within the total public debt stock to gross domestic product (GDP) limit of 55 percent set by the World Bank and 70 percent set by the Economic Community of West African States (ECOWAS).

She added that the federal government is “mindful of the relatively high debt-to-revenue ratio” and has initiated various measures to increase revenues through the strategic revenue growth initiative and the introduction of Finance Acts since 2019.

“The new borrowings were raised from diverse sources, primarily through the issuances of the Eurobonds, sovereign Sukuk, and the FGN bonds. These capital raisings were utilised to finance capital projects and support economic recovery,” she added.

“With the total public debt stock to GDP as at December 31, 2021, of 22.47 percent, the debt-to-GDP ratio still remains within Nigeria’s self-imposed limit of 40 percent. This ratio is prudent when compared to the 55 percent limit advised by the World Bank and the International Monetary Fund (IMF) for countries in Nigeria’s peer group, as well as, the ECOWAS convergence ratio of 70 percent.”

Despite low debt-to-GDP, Nigeria’s debt-to-revenue ratio is alarming. In 2020, out of the federal government’s total revenue of N3.42 trillion in 2020, N3.34 trillion was used to repay loans, representing 97 percent.

The Cable