- Nigeria's debt problem is set to get worst for whosoever will take over from President Buhari as next president
- Many loans collected over the years will be maturing and it will cost the country a whopping N24.7trn in three years
- Although this is a projected debt service repayment obligation, it, however, gives idea of what lies ahead for the next president of Nigeria
After President Muhammdu Buhari leaves office in 2023, the next president of Nigeria will spend the first three years at the helm of affairs repaying N24.7trn matured debt.
The debt servicing plan for 2023 to 2025 is contained in FGN 2023 Budget Call Circular published by the Budget Office.
Bola Ahmed Tinubu, Atiku Abubakar, and Peter Obi, the presidential candidates for the All Progressive Congress, People's Democratic Party, and Labour Party, respectively, are the front-runners to bear this burden.
According to the document, the federal government of Nigeria is targeting to spend N10.4 trillion on debt servicing by 2025 as more loans mature.
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The projected amount to be spent by the FG in 2025 on debt service is more than the total budget size of previous years since Nigeria gained independence, except for 2021 and 2022.
For 2023, in the Budget circular, FG is also projecting debt servicing could gulp at least N6.31 trillion.
The federal government noted that the debt service is made up of N3.295 trillion for Domestic Debt, N1.20 trillion for service on ways & means and N1.814 trillion for Foreign Debt. Additionally, N292.7 billion is provisioned for Sinking Fund to retire maturing loans.
For 2024 another N8.06 trillion is to be spent on debt servicing; this brings the total projected figure to N24.7 trillion in three years.
Debt service 2022
Already, Nigeria is targeting to spend just close to N5 trillion on debt service this year.
According to ThisDay, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, in the first three months of 2022, N1.94 trillion had been paid to creditors.
This is N310 billion higher than the actual revenue received by the federal government within the same period.
Top five states with highest external debt
Meanwhile, with Naira going through a rough patch against the US dollar, servicing the external debts of 36 states in Nigeria has become more expensive.
Data from the Debt Management Office (DMO) showed that as of December 2021 the total external debt stock of 36 subnational governments and the Federal Capital Territory Abuja stood at $4.77 billion.
As of December 2021, the states with the highest external debts were Lagos, Kaduna, Cross River, Edo, and Rivers.