Saturday, July 13, 2024

DMO explains the factors behind Nigeria’s N24trn debt increase

Explanation of Nigeria’s Increased Debt Stock by N24 Trillion: DMO Clarifies Factors Behind the Rise

In recent news, the Debt Management Office (DMO) has shed light on the factors contributing to Nigeria’s significant increase in total debt stock. According to the Director General of DMO, Patience Oniha, the securitisation of N4.90 trillion Ways and Means loan and fluctuations in foreign exchange rates are key reasons for the rise in Nigeria’s debt to N121.67 trillion by the end of March 2024.

This revelation comes amidst concerns from Nigerian stakeholders about the country’s escalating debt profile. The public debt stock surged from N97.34 trillion in December to N121.67 trillion in just three months, marking a 24.99% increase. However, Oniha clarified misconceptions surrounding the updated debt figures, pointing to the securitisation of N4.90 trillion and new borrowing of N2.81 trillion as outlined in the 2024 budget.

It is crucial to note that the total debt stock encompasses both domestic and external debts of the 36 states and the Federal Capital Territory. Oniha highlighted the impact of economic reforms on the debt stock, particularly the fluctuating dollar/naira exchange rate and interest rates. The disparity in naira values between the two periods accounted for a significant portion of the debt increase, while the exchange rate variance led to a decline in the total debt stock in dollar terms.

As Nigeria navigates through economic reforms and strives to manage its debt burden effectively, transparency and understanding of the factors influencing the debt stock are essential. The DMO’s explanation provides valuable insights into the complexities of Nigeria’s debt situation and underscores the importance of informed decision-making in fiscal management.

Disclaimer: The information provided in this article is for informational purposes only and should not be considered as financial advice. The content is based on general research and may not be accurate, reliable, or up-to-date. Before making any financial decisions, it is recommended to consult with a professional financial advisor or conduct thorough research to verify the accuracy of the information presented. The author and publisher disclaim any liability for any financial losses or damages incurred as a result of relying on the information provided in this article. Readers are encouraged to independently verify the facts and information before making any financial decisions.

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