Nigeria’s Debt Rises to N121trn as World Bank Issues Conditions for Loan Cancellation

• Nigeria’s debt has now hit N121 trillion, according to data from the Debt Management Office (DMO)
• The DMO said the country added about 24.33 trillion to its public debt stock, mostly from domestic borrowings, to fund the budget shortfall
• The World Bank recently approved a $2.25 billion facility for Nigeria to drive rural development

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment, and the economy for over a decade.

The Debt Management Office (DMO) says Nigeria’s total public debt has risen to N121.67 trillion in three months.

The amount represents an increase of N24.33 trillion or 24.99% from the N97.34 trillion as of December 2023.

FG borrows more money to fund budget

Nigeria’s debt stock consists of the Nigerian government's domestic and external debts incurred by the 36 states and the Federal Capital Territory (FCT).

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The DMO said the rise was due mostly to the Nigerian government's new domestic borrowings to fund the 2024 budget deficit and the disbursement by multilateral bilateral creditors.

The DMO said:

“Whilst borrowing, as provided in the 2024 Appropriation Act, will continue, we expect improvements in the government’s revenue to enhance debt sustainability.”

World Bank approves new loan for Nigeria

The World Bank recently approved a $2.25 billion loan for Nigeria to accelerate development in rural areas.

Finance minister and coordinating minister of the economy, Wale Edun, confirmed the new World Bank facility.

According to reports, the Bureau of Public Enterprises (BPE) said the Nigerian government secured a $500 million World facility to enhance electricity distribution in Nigeria.

The Nigerian government had previously obtained $750 million from the World Bank for humanitarian and social reforms and $1.5 billion for its economic stabilization plan.

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World Bank gives Nigeria new conditions

Meanwhile, the World Bank has listed conditions that could lead to loan cancellation for Nigeria.

Per reports, the global lender indicated that it may cancel the $1.5 billion loan if Nigeria fails to meet the requirements outlined in the financing agreement.

The information is based on the financing agreement for Nigeria’s Reforms for Economic Stabilisation to Enable Transformation (RESET) Development Financing Programme (DPF) project.

The World Bank said:

"If, after this exchange of views, the Bank is not so satisfied, it may give notice to the Borrower to that effect, and if, within ninety (90) days after the notice, the Borrower has not taken steps satisfactory to the Bank, with respect to paragraphs (a), (b) and (c) above, then the Bank may, by notice to the Borrower, cancel all or any part of the Unwithdrawn Loan Balance.” 

A previous report by Legit.ng revealed that the World Bank Group is Nigeria’s biggest lender, with an estimated $14 billion, according to DMO data.

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Tinubu’s new borrowings take Nigeria’s public debt surging

Legit.ng reported that DMO data has revealed that Nigeria’s public debt has hit about N97.34 trillion as of Q4 2023.

DMO stated this in a statement on Friday, March 22, 2024.

The DMO said Nigeria’s public debt, as of December 31, 2023, stood at 97.34 trillion or $108.22 billion.

Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng

Source: Legit.ng