Saturday, July 13, 2024

DMO reports Nigeria’s borrowing of N7.71 trillion in Q1 of 2024

Clarification on Nigeria’s Fresh Borrowing and Debt Increase in Q1 2024

The recent clarification by the Debt Management Office (DMO) regarding Nigeria’s public debt in the first quarter of 2024 has sparked a lot of discussion and debate. With a total increase of N24.33 trillion in the country’s debt, many were quick to assume that it was solely due to new borrowing. However, the DMO has shed light on the fact that the increase was a combination of fresh borrowing and naira devaluation.

The DMO explained that out of the N7.71 trillion in fresh borrowing, N2.81 trillion was part of the new domestic borrowing provided in the 2024 Appropriation Act, while N4.90 trillion was from the securitization of the N7.3 trillion Ways and Means Advances approved by the National Assembly. The remaining increase in debt was attributed to the depreciation of the naira against the dollar, with the exchange rate shifting significantly from N899.39/$1 in Q4 2023 to N1,330.26/$1 in Q1 2024.

This clarification is crucial in understanding the dynamics of Nigeria’s public debt and dispelling any misconceptions about the country’s borrowing practices. It highlights the impact of external factors such as currency devaluation on the country’s debt profile and emphasizes the need for a comprehensive understanding of the factors influencing the debt levels.

As Nigeria continues to navigate its economic challenges, it is essential for policymakers and stakeholders to have a clear understanding of the country’s debt situation and the factors driving it. The DMO’s transparency in providing this clarification is a step in the right direction towards promoting accountability and informed decision-making in managing Nigeria’s public finances.

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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