Nigeria, India, China, Others Make List of Top 10 Biggest Debtor Countries
- The latest International Finance Corporation report has identified Nigeria among the top 10 biggest debtors in the world
- Nigeria was listed with approximately $2.02 billion in debt, securing the ninth spot among the ten featured countries.
- Nigeria's DMO had disclosed that the country's aggregate public debt reached N87.38 trillion as of September 2023
Legit.ng journalist Victor Enengedi has over a decade of experience covering Energy, MSMEs, Technology and the stock market.
In the fiscal year 2023, Nigeria, the most densely populated nation in Africa, secured a position among the top 10 debtors per the International Finance Corporation's records.
This information was revealed in the comprehensive financial report for the year 2023, titled "World Bank Group 2023 Summary Results," which is accessible on the corporation's official website.
Source: UGC
Within the financial report's section labelled 'IFC's largest country exposure,' Nigeria was listed with approximately $2.02 billion, securing the ninth spot among the ten featured countries.
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Nigeria's debt continues to rise despite efforts by President Bola Tinubu's administration to pay back some of the loans obtained during former President Muhammadu Buhari's administration.
India, Brazil, Turkey top the list
The distribution of loans to nations with substantial borrowing levels indicates that Romania occupied the 10th position, right after Nigeria, with $1.72 billion.
Right on top of Nigeria is Indonesia, occupying the eighth position with a debt of $2.17 billion.
Vietnam and Colombia hold the seventh and sixth positions, with debts amounting to $2.1 billion and $2.3 billion, respectively.
South Africa secures the fifth position on the chart, having obtained approximately $3.23 billion in debt.
The leading four debtor nations in ascending order are India with $7.28 billion (1st position), Brazil with $5.6 billion (2nd position), Turkey with $4.65 billion (3rd position), and China with $3.23 billion (4th position).
Reacting to Nigeria's high debt profile, Ifeanyi Jeremiah Ubah, a Research Lead at Comercio Partners, a Lagos-based investment firm, said high levels of debt can hinder sustainable development.
He said:
"Addressing the root causes, such as improving revenue generation, prudent financial management, and implementing effective economic policies, is crucial for Nigeria to navigate its debt situation and ensure long-term prosperity."
Nigeria's total debt stock rises
In September, the Debt Management Office revealed that Nigeria's aggregate public debt reached N87.38 trillion by the conclusion of the second quarter of 2023.
This figure indicates a surge of 75.29% or N37.53 trillion when juxtaposed with the N49.85 trillion recorded at the close of March 2023.
The disclosed debt encompasses the N22.71 trillion in Ways and Means Advances provided by the Central Bank of Nigeria to the Federal Government.
The need for caution on Nigeria's rising debt stock
The country has faced challenges in managing its external debt, which has been exacerbated by factors such as fluctuating oil prices, economic instability, and the impact of the COVID-19 pandemic.
Samuel Oyekanmi, a macroeconomic analyst, said Nigeria has been grappling with a significant burden of international debt for a long time.
In an exclusive comment to Legit.ng, Oyekanmi said that the previous administration engaged heavily on borrowings, hence the rise in debt stock.
He said:
The government persists in resorting to debt issuance to cover immediate expenditures, anticipating the rollover of this debt with new borrowings in the future, instead of actively generating ample revenue or implementing cost-cutting measures to settle the existing debt.
Consequently, this practice results in an escalating government debt burden, ultimately reaching a point of unsustainability.
In the preceding year, a significant portion of Nigeria's revenue was allocated to servicing its debt. According to the latest data, Nigeria is teetering on the brink of a potential debt crisis.
Oyekanmi however implored the federal government to desist from heavy borrowings and to ensure the funds already borrowed are diligently utilised on projects that will improve the economy.
Obasanjo delivers prediction on Nigeria's debt profile
In related news, Legit.ng reported that Olusegun Obasanjo has stated that given Nigeria's extensive debt portfolio, the country may find it difficult to secure debt relief.
The former president said this during a ceremony with the 2023 recipients of the Future Africa Leaders Foundation, an initiative of Pastor Chris Oyakhilome.
Obasanjo also said that successive administrations' alleged mismanagement of the debt relief from the Paris Club has caused the country to plunge into a vast and undeserved debt.
He added that the coming generations will have no choice but to pay the current debt incurred by different countries.
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Source: Legit.ng
