The Debt Management Office (DMO) has issued a strong rebuttal against recent media reports that grossly misrepresented the nation’s debt burden inherited by President Bola Ahmed Tinubu. These reports erroneously claimed that the President assumed office with a mere N21 trillion in public debt, a figure far from reality.
In an official statement released, the DMO categorically stated that the actual total public debt as of June 30, 2023, the first official data point after President Tinubu’s inauguration on May 29, 2023, stood at a substantial N87.38 trillion.
This figure, the DMO emphasized, encompasses the combined external and domestic debt obligations of the Federal Government, all 36 states, and the Federal Capital Territory. “The Total Public Debt published by the DMO comprises the External and Domestic Debt, not only of the Federal Government of Nigeria (FGN) but also of the thirty-six (36) States and the Federal Capital Territory,” the statement unequivocally declared.
Misinformation and the Need for Accuracy
This clarification from the DMO comes amidst widespread confusion and alarm generated by the erroneous reporting. Several media outlets disseminated the misleading N21 trillion figure, creating a distorted picture of the nation’s financial health and potentially eroding public trust in the government’s ability to manage its fiscal affairs.
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The DMO strongly urged the public and media outlets to rely solely on verified data from official sources to avoid the dissemination of misinformation, particularly on critical economic issues like public debt. “The news headline circulating in the media titled, ‘How Nigeria’s Debt Rose from N21 trillion to N142 trillion under Tinubu’ is inaccurate,” the statement firmly asserted.
Understanding the Debt Landscape
The accurate N87.38 trillion debt figure provides a more realistic assessment of Nigeria’s financial obligations. It reflects a complex web of financial commitments, encompassing both external borrowings from international financial institutions like the World Bank and the International Monetary Fund (IMF), and domestic debt instruments such as government bonds and treasury bills.
Addressing this growing debt burden presents a significant challenge for the current administration. Experts agree that sustainable economic growth will necessitate a multi-pronged approach, including strategic measures to boost government revenue, curb wasteful spending, and improve the overall efficiency of public expenditure.
The Weight of Debt Servicing
Nigeria’s rising debt service obligations are a growing concern. Servicing external debts, particularly to multilateral lenders, has become a significant drain on public resources. In the third quarter of 2024, a staggering 88.2% of total government expenditure was directed towards debt servicing, with multilateral creditors like the IMF and World Bank receiving the lion’s share.
“Payments to multilateral creditors alone, such as the IMF and World Bank, represented 88.2% of the total expenditure in Q3 2024,” the DMO report revealed.
This heavy debt service burden underscores the urgent need for fiscal reforms to ensure that public resources are allocated effectively and efficiently. The 2025 budget, currently under consideration by the National Assembly, reflects this reality, allocating a significant N16.327 trillion out of the proposed N49.7 trillion expenditure to debt servicing.
Despite the challenges posed by the growing debt burden, the DMO recently demonstrated investor confidence in the Nigerian economy through the successful issuance of $2.2 billion Eurobonds on the international capital markets. This issuance, which attracted subscriptions exceeding $9 billion, signals a degree of optimism among international investors regarding the nation’s economic prospects.
The DMO’s clarification regarding Nigeria’s actual debt stock is crucial for accurate public discourse and informed decision-making. By setting the record straight, the agency aims to ensure that the public and policymakers have access to reliable information to navigate the complex challenges of managing the nation’s finances. Addressing the growing debt burden will require a concerted effort to strengthen the economy, improve revenue generation, and ensure that public resources are utilized effectively and efficiently for the benefit of all Nigerians.
