Analyst Says CBN's Ways and Means Loans Will Push Nigeria's Public Debt Above N70 Trillion

• Investment research analyst says CBN's "ways and means" loans will trigger Nigeria’s debt stock to climb to N70 trillion
• However, important reforms will increase Nigeria’s revenue base to finance new administrations promises
• He added that new policies in the oil and non-oil sector will lead to a 2.94% improvement in GDP

Nigeria’s public debt is expected to surpass N70 trillion as a result of accumulated debt from securitized ways and means, an analyst at Meristem Securities, a Lagos-based investment firm, has said.

Sodiq Safiriyu, an investment research Analyst in his presentation of the macroeconomic outlook for the second half of 2023 at a webinar said the revenue base and debt structure of Nigeria has continued to be on the uptrend.

According to Vanguard, Safiriyu said he expects the government to implement important reforms to increase its revenue base in order to finance its promises, through borrowings, hence leading to increase in debt stock.

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Dissecting the theme, “Tough Start, Bumpy Road, Propitious End”, Safiriyu further projected a 2.94% GDP improvement in the second half of the year on the back of accelerating activities triggered by the new administration’s policy in both the oil and non-oil sector.

He said:

“What we expect in second half 2023 is that the GDP growth will be higher and this hinges on the improvement in business activities in the non oil sector. As well we expect that policies from the administration of President Bola Ahmed Tinubu will help to increase oil production volume during the period.

Inflation expectation

According to Safiriyu, inflation, expectedly will continue to increase as a result of rice in food price. This, he said will drive the Monetary Policy Committee (MPC) to raise rate by 100 basis points.

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He also noted that the expected hike in rate may not be as aggressive as seen in the first half of the year.

Nigeria’s debt stock hits N82 trillion amid CBN’s naira devaluation

Meanwhile, Legit.ng earlier reported that Nigeria's public debt rose to N82 trillion before the central bank of Nigeria exchange rate unification, announced on Wednesday, June 14th 2023.

This follows a press release by the CBN that states all exchange rate windows are now collapsed into the Importers and Exporters window (I&E Window) to depict a merger of the multiple exchange rate.

Prior to the flotation of the naira, the Debt Management Office (DMO) estimated Nigeria's debt stock at N448 billion.

However, subsequent to the flotation, the total debt stock has risen from approximately N79 trillion to N82 trillion.

Source: Legit.ng