- A tenure-by-tenure analysis of Nigeria’s external debt shows that in only 10 months, it increased by N22.77 trillion
- Rising debt raises concerns about the country’s debt profile, sustainability and cost of servicing debts
- Nigerians are querying what the borrowings were used for by successive governments
As of March 2024, Nigeria’s external debt stood at N56.02 trillion, a N22.77 trillion increase from the N33.25 trillion it was at the end of President Muhammadu Buhari’s administration.
According to data from the Debt Management Office (DMO), aggregated and posted by StatiSense on X (formerly Twitter) on August 30, the figure was achieved in just 10 months of President Bola Tinubu's administration.
The data, which traced external debts under the various presidents of Nigeria, noted that at the onset of President Shehu Shagari’s administration, Nigeria’s external debt was N2.3 billion and rose by N8.2 billion to N10.5 billion by the end of the administration in 1983.
Under General Muhammadu Buhari’s tenure, external debt increased by N6.8 billion to N17.3 billion when the administration was ousted in 1985
When General Ibrahim Bademosi Babangida took over power in 1985, Nigeria’s external debt rose by N615.8 billion from N17.3 to N633.1 billion in 1993.
The country’s external debt remained the same in the three months of Ernest Shonekan’s administration. It increased marginally by N200 million to N633.3 billion in 1998 under General Sani Abacha.
Under Abdulsalami, external debt reached over N1 trillion
In just about a year of Abdulsalami Abubakar’s administration, external debt crossed the trillion naira mark, jumping from N633.3 billion to N2.28 trillion.
Between 1999 and 2003, when Olusegun Obasanjo was president, Nigeria’s external debt fell significantly from N2.28 trillion to N438.9 billion. It would later increase by N250.9 billion to N689.8 under late President Umaru Musa Yar’Adua’s administration.
When President Goodluck Jonathan took office, Nigeria’s external debt increased to trillions of naira again, from N689.8 to N2.11 trillion. In the eight years of President Muhammadu Buhari’s administration, external debt rose by N31.14 trillion from N2.11 trillion to N33.25 trillion.
In just 10 months under President Tinubu, the external debt has increased by N22.77 trillion, from N33.25 trillion to N56.02 trillion.
Continued borrowing raises concerns about debt sustainability
The many times the Tinubu administration has requested loans from foreign and domestic sources to fund projects have raised concerns about the country’s debt profile, sustainability and cost of servicing debt.
In its Nigerian Domestic and Foreign Debt Report for Q1 2024, released on June 20, the DMO said external debt increased to N56.02 trillion ($42.12 billion) in the first quarter (Q1) of 2024 from N38.22 trillion ($42.495 billion) recorded in as at December 31, 2023, representing a 46.57 per cent increase.
Domestic debt on the other hand rose to N65.65 trillion ($49.35 billion) in Q1 2024 to N59.12 trillion ($65.73 billion) recorded as of December 31, 2023, indicating an 11.05 per cent increase.
Despite the country’s burgeoning debt profile, the Federal Government hasn’t stopped borrowing to fund projects and reforms, which has risen to the tune of N20.1 trillion under the one-year administration of President Bola Tinubu.
The country’s huge debt profile raises concerns about increased pressure on inflation, higher borrowing costs for businesses, gulping of the country’s revenue and cost of debt servicing.
Concerning debt servicing, the government spent $15.55 billion to service debts between 2019 and 2024, according to the CBN. In the five months between January and May 2024, Nigeria spent $2.18 billion on debt service.
There are also concerns about debt sustainability that may lead to a debt trap of default as analysts have already predicted that Nigeria’s debt servicing will escalate to $400 million to reach $5.2 billion by 2026.
Again, it is believed that the huge borrowings have not translated into economic growth and development and pose a significant risk of economic stagnation and higher fiscal vulnerabilities.
‘What did they do with all the borrowings?’
Reacting to the news, netizens have queried what the different administrations did with the external debts as the amounts borrowed have not translated into development in the country.
They also commended some presidents like Obasanjo and Yar’Adua for either reducing the borrowings or keeping them at a minimal rate.
@JohnsonOkunadeA said, “We are proud of Obasanjo. Wow, that man is the greatest of all time, the real GOAT. Nawa for Abdulsalami o, all that in 11 months, for what? Both GEJ and PMB no try at all. I’m scared for the future of this country, 22.8tn debt already incurred in a year, and yet the country is like this, what did BAT use all the money to do?”
@TimedFrank wrote, “PMB (8 years): N31.14tn. BAT (1.25 years): N22.77tn. “Subsidy is Gone” “The Naira has been floated” “We don’t need his body, we need his brain” EyeNeck 👊👊”
@odukoyaisaac tweeted, “We’ve got to give a hand of applause to OBJ, Yaradua!!! The country began spoiling the moment Yaradua died.”
@zubidavies said, “All I see is eating away at the country’s future because no investment was made to regenerate money in the economy.”
@_iRoyalty wrote, “And the fools in APC started to talk down on OBJ… I mean, Tinubu has done one year in office already and he added over N22 Trillion to the debt without anything to show for it. A congenital failure.”
@kashworths tweeted, “Abdulsalam and Jonathan need to be questioned! Both of them have nothing to show for the debts.”
@ishmael_Akanni said, “You see your peace keeper ambassador? We’re not ready to invite Abdulsalam to the table for explanation on how he commissioned and finish a project worth of millions in just one day.”
@billyofeast1 wrote, “Obasanjo did well. Na IBB first finish Nigeria o. Abeg how was ABACHA a bad leader when we had no exchange in our external debt during his time.”
@Sundey55583751 tweeted, “OBJ is the only prudent president Nigeria has ever had. In all economic parameters he surpassed all. No one has ever matched or surpassed his achievements.”
@Iam_JideTaiwo said, “Abdulsalami was head of state for a year, and he accrued so much debt. No need to question him, na paddypaddy and chop-make-I-chop government we dey run. Also, IBB? Maybe they’re waiting for their demise sha.”
@AlabedeTobi said, “OBJ- the greatest Nigerian President ever. Abdulsalam – what magic did he perform in one year??? As per how did that debt profile rise to trillions?”
@MsMKaura tweeted, “GEJ is really terrible. Despite the oil boom throughout his tenure but still borrowed over N2trn with nothing to show for it. Even the road to his village was constructed by Buhari. Abdulsalam still owes Nigerians explanation.”
“APC Impact?” Nigeria’s economy drops to 4th in Africa, loses $315.8bn in 10 years
Meanwhile, TheRadar reported that Nigeria’s economy lost $315.8 billion in the 10 years between 2014 and 2024 and fell from being the first largest economy in Africa to the fourth, according to data from StatiSense, a leading data company using AI to simplify data and documents.
According to the data, between 2023 and April 2024, Nigeria lost an estimated $122.2 billion, moving from the third to the fourth largest economy in Africa.
