Recent statistics from the Debt Management Office (DMO) predict that by 2025, Nigeria’s public debt will have skyrocketed to an astounding N187.8 trillion. Economists and decision-makers are concerned about the long-term viability of the nation’s borrowing policies in light of this concerning statistic.Growing budget deficits and reliance on loans to fund infrastructure projects and pay off current debts are the main causes of the increase.
The problem has been made worse by growing borrowing costs, which now account for a sizable amount of the country’s income in interest payments. Experts caution that this might divert resources required for vital areas including security, healthcare, and education. In order to address the debt issue, the International Monetary Fund (IMF) has also voiced concern and urged Nigeria to strengthen its capacity to generate revenue and enact fiscal reforms.
By claiming that the money is going towards infrastructure development, which is essential for economic expansion, the federal government has defended its borrowing policy. The high expense of repaying these debts and the opaqueness of fund use, according to opponents, continue to be major obstacles.
A comprehensive debt management strategy that prioritises domestic revenue generation, controls wasteful expenditure, and lessens reliance on foreign loans is being called for by financial experts in order to address these problems. Nigeria runs the risk of experiencing a more severe fiscal crisis in the upcoming years if major changes are not implemented.
