The United Nations has warned that elevated public debt is limiting the capacity of Nigeria and other developing African countries to boost necessary spending needed to counter the devastating effects of the Covid-19 pandemic on their economies.
This may eventually lead to an escalation of social unrest and political tensions, which could in turn worsen food insecurity, violence, internal displacement and migration pressures.
According to the Debt Management Office, (DMO), total public debts as of the end of 2020 amounted to N32.9 trillion.
Of the figure, the Federal Government owed N26.8 trillion to both domestic and foreign creditors while 34 states and Federal Capital Territory owed N5.9 trillion.
In a report on its website, the Debt Office explained that N4.2 trillion was added to the debt stock in 2020 alone as a result of the economic effects of the Covid-19 pandemic.
Katsina and Rivers states did not submit their figures at the time the DMO was compiling the report.
As a result of the debt figure, the Federal Government spent 82.9 percent of its 2020 revenue on debt service.
According to the information contained in the budget implementation report of the government for the year ended December 2020, the total revenue earned during the year was N3.93 trillion, representing a 27 percent drop from the target revenues of N5.365 trillion. Of the N3.93 trillion revenue, N3.26 trillion was devoted to debt service.
The ‘World Economic Situation and Prospects 2021’ noted “African countries are experiencing an unprecedented economic downturn with major adverse impacts on development.