Nigeria’s inflation rate has soared to 25.80 per cent and the national debt surged to N87.38 trillion in the second quarter of year 2023.
Credible News Nigeria reports that in August, the overall inflation rate rose to 25.80 percent, primarily due to the 13.36 percent increase in food and non-alcoholic beverage prices.
This number is 1.72 percentage points greater than the headline inflation rate in July 2023, which was 24.08 percent.
The headline inflation rate was 5.27 percent points higher on an annual basis than the rate, which was 20.52 percent in August 2022.
This is true despite the fact that in the second quarter of 2023, the country’s overall debt stock increased to N87.38 trillion.
This amount marks a rise of 75.29 percent, or N37.53 trillion, over the N49.85 trillion reported at the end of March 2023, according to the National Bureau of Statistics (NBS).
The Central Bank of Nigeria’s N22.71 trillion Ways and Means Advances to the Federal Government are included in the debt, according to the NBS.
The overall public debt stock in Nigeria was N87.38 trillion ($113.42 billion) as of June 30, 2023, the study states.
It consists of the total debts owed by the 36 states, the Federal Capital Territory, and the Federal Government of Nigeria.
The N22.712 trillion securitized FGN Ways and Means Advances and new borrowings by the Federal Government and the subnationals from domestic and foreign sources were identified as the most significant additions to the Public Debt Stock.
According to a breakdown of the debt stock, Nigeria has a total of N54.13 trillion in domestic debt, which accounts for 61.95 percent of the overall debt, and N33.25 trillion in external debt, which represents 38.05 percent of the total debt.
Patience Oniha, the Director-General of the DMO, had noted that the debt would reach N70 trillion without N5 trillion in new borrowing and N2 trillion in promissory notes during a public presentation of the 2023 budget organised by the former Minister of Finance, Budget, and National Planning, Dr. Zainab Ahmed.
However, according to the most recent data, the DMO’s prediction was N10.38 trillion lower than the current debt stock of N87.38 trillion.
Lead Director of the Centre for Social Justice (CSJ), Mr. Eze Onyekpere, responded to the increase in debt stock by stating that while the rising debt is concerning, it must have been caused by the modified value of the naira relative to international debts.
Onyekpere said: “But even at that, we are still borrowing,” adding that the government should be very cautious about how it incurs debt and to what use we put the money we borrow.
“We also need to make the process of borrowing more transparent. The government should be able to advertise the fact that they are going to borrow and the purpose for the borrowing. “We cannot continue to borrow for consumption. If 50 percent of that money was invested in capital projects, we won’t be where we are today, ” he pointed out.
Speaking in the same vein, an economic analyst, Professor Jonathan Aremu said though he does not have details of what composition of the debt, nigerians should be worried about the increasing debt because whatever be the case, the debt must be paid.
He said it will be more worrisome if the monies borrowed were not put into productive activities but for consumption.
He also cautioned that the government should be very careful about borrowing
