July 01, (THEWILL) –Concerns have heightened over Nigeria’s debt-to-Gross Domestic Product (GDP) ratio, as it exceeded 50% for the first time ever, according to a recent report of the Debt Management Office (DMO).
The debt-to-GDP ratio is the metric used for measuring a country’s public debt to its GDP.
According to the DMO, Nigeria now has a public debt portfolio of N121 trillion, comprising a domestic debt of N65.6 trillion and a foreign debt portfolio of $42.1 billion (N56 trillion).
As of December 2023, Nigeria’s total GDP was N229.9 trillion and with a debt profile of N121 trillion, this shows that the country’s debt-to-GDP ratio is now above 50% for the first time.
Over the years, Nigeria has prided itself on its ‘low’ debt-to-GDP ratio, which it identifies as a sign of the country’s economic resilience. This suggests there was more room to expand its borrowing capacity.
In the first quarter of 2024, Nigeria recorded a nominal GDP of N58.5 trillion, up from N51.2 trillion in the corresponding period in 2023. The second and third quarters of 2023 showed nominal GDP figures increased to N52.1 trillion and N60.6 trillion respectively.
The fourth quarter GDP, however, rose to N65.9 trillion, making the trailing four-quarters GDP total N237.5 trillion.
According to Nairametrics, the country’s total GDP was N229.9 trillion in nominal terms towards the end of 2023, yet it widened at a rate of only 2.74% in real terms. Thus, the country’s debt-to-GDP ratio has surpassed 50% for the first time.
Expressing concerns over the development, the Chief Executive of CFG Advisory, Tilewa Adebayo, stressed the urgent need for remedial legislation as well as an overhaul of the trade, industrialisation and investment policy of the country.
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