New Report Lists Nigeria and 10 Other West African Countries as Being in Debt Crisis

New Report Lists Nigeria and 10 Other West African Countries as Being in Debt Crisis

  • Nigeria and 10 other West African countries are in a huge debt crisis that may threaten the region
  • A new report by the Nigerian Economic Summit Group and Open Society Initiative says the debts are unsustainable in the region
  • The report cited Nigeria as one of the hugely indebted countries in the ECOWAS and warned that there is a looming financial crisis

An economic crisis in Nigeria could snowball into a catastrophe in the West African region, says a new report by the Nigerian Economic Summit Group and the Open Society Initiative for West Africa.

According to The Punch, the report says that Nigeria and 10 other West African countries under the ECOWAS belt are currently having debt distress which is based on debt sustainability analysis carried out by the two organisations.

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Nigeria, Ghana, Senegal. Togo, Debt Crisis
Nigeria and other West African countries already in debt crisis Credit: valentinrussanov
Source: Getty Images

The other countries are Benin Republic, Burkina Faso, Cape Verde, the Gambia, Ghana, Guinea Bissau, Liberia, Niger Republic, Senegal and Togo.

Nigeria, the heaviest debt country in West Africa

The report was launched recently at the Debt Management Office in Abuja.

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It also stated that the accumulation of public debt in the region is unstainable and emphasized the need to avert an impending debt crisis.

Countries in the West African region need to act early enough to stop the coming debt distress, the report stated, saying failure to address the current crisis will mean a lost decade where getting debt settlement will be the only priority for successive governments over the years.

Debt Service to revenue ratio, a huge challenge in Nigeria

The report further highlighted the high debt service to revenue ratio in the region, particularly in Nigeria.

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Nairametrics report indicates that Nigeria recorded a 97 per cent debt service to revenue ratio in the five months of 2021.

The possibility of debt trouble in Nigeria will affect adversely public and private investments and many other things which will further affect the region.

Nigeria’s total public debt profile jumped to N39.56 trillion in 2021 from N32.92 trillion in 2020, the Debt Management Office said.

Nigeria borrowed N5.64 trillion in 2021 and spent about N2.39 trillion servicing debts in the same year.

While the country borrowed about N6.64tn in 2021, it spent about N2.93tn on debt servicing payments in the same year.

Nigerian Government spends N41.9 billion on debt servicing in January alone has reported that Nigeria’s monthly debt servicing increased by $31.46 million in one month to $101.29 million in January, according to figures released by the Central Bank of Nigeria (CBN).

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The Punch report shows a 45 per cent jump month-on-month.

The CBN said in its data on debt service repayment that the federal government spent about $69.83 on debt service repayment in December.


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