Nigeria's foreign debts balloon to $40bn servicing costs look set to surpass government revenue

NIGERIA'S total foreign debts ballooned to $40bn as of at the end of March this year from $38.4bn in December 2021 with domestic debt also increasing to N25trn ($60.1bn) from N27.7trn during the same period.

According to statistics just published by the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (Naccima), these huge debts are becoming unsustainable. Naccima president Ide Udeagbala, said Nigeria’s debt profile was worrisome, especially against the backdrop of a projection by the International Monetary Fund that by 2026, all of the country's revenue would go to servicing debt.

At Naccima's third quarter briefing in Lagos, Mr Udeagbala focused on socio-economic issues of interest to the  private sector. During the briefing, he also reviewed the state of the economy and Naccima’s contributions on key issues and policies for an inclusive growth across Nigeria.

Among other things, Mr Udeagbala counselled all levels of government to consider other sources of funding, such as leveraging public-private-partnerships for tax credits spread over time. He added: “This is so as we consider that the national budget is heavily skewed towards recurrent expenditure that is largely unmet by the estimated government revenue.”

According to the federal government's 2022 fiscal performance report for the first four months of 2022, total revenue for the period was N1.63trn, while debt service gulped N1.94trn. While giving updates on the budget performance, finance minister Zainab Ahmed, said urgent action is required to address revenue under-performance and expenditure efficiency at national and sub-national levels.