Nigeria Borrowed N7.71 Tr In Q1 2024; Obi Demands Breakdown

Nigeria Borrowed N7.71 Tr In Q1 2024; Obi Demands Breakdown

The 2023 presidential candidate of the Labour Party, Peter Obi, has urged the Federal Government to do a detailed breakdown on the utilisation of borrowed funds.

Obi made the demand in a post on X on Monday while decrying significant increase in government borrowing at the end of first Quarter (Q1) which he said reached a staggering N121.86 trillion.

He warned that if the current trend persists, the total amount borrowed could exceed N150 trillion by the end of the year.



“I have consistently maintained that borrowing is not inherently problematic, as long as it is utilized for productive purposes that drive economic growth and development,” Obi said.


“The recent report at the end of the first quarter indicates a significant increase in our government’s borrowing, reaching a staggering N121.86 trillion.

“This rapid accumulation of debt is alarming, and if this borrowing trend continues at the current rate, we can expect the total to surpass N150 trillion by the end of the year.


“The fact that several trillions was borrowed in just three months highlights the urgent need for prudent management of our finances. It is crucial to recognize that the purpose of borrowing is paramount.

“If the borrowed funds are used for consumption or misallocated, we risk worsening our economic situation, perpetuating a cycle of debt and hindering our ability to achieve sustainable economic growth and development.


“On the other hand, if the funds are channelled into productive endeavours such as infrastructure development, education, healthcare, and entrepreneurship, we can expect positive outcomes that benefit our economy and citizens in the long run.

“As I recall, the law governing borrowing is explicit, requiring detailed explanations of the intended use, timing, and other relevant parameters.

“It is essential to ensure that borrowed funds are allocated efficiently and effectively to drive economic growth, create jobs, and improve the standard of living of the majority of our citizens.

“I respectfully request same for accountability for the massive borrowings, which have burdened our nation’s future.


“For the sake of our children and unborn generations, transparency and good governance, a detailed breakdown of how these funds have been utilized and demonstrate their tangible impact on our country’s growth and development should be provided.”


The former Anambra State governor urged policy makers and stakeholders to exercise caution and prudence in managing national debt, ensuring that borrowed funds are utilised for productive purposes.

He said that by doing so “we can promote sustainable economic growth, development, and prosperity for all Nigerians for generations to come.


On Wednesday, 26th June, the Debt Management Office (DMO) clarified that Nigeria’s fresh borrowing was N7.71 trillion in the first quarter of 2024.

It explained that the fresh borrowing includes N2.81 trillion as part of the new domestic borrowing of N6.06 trillion provided in the 2024 Appropriation Act and N4.90 trillion as part of the securitization of the N7.3 trillion Ways and Means Advances approved by the National Assembly.


The DMO made the clarification in a statement titled, “Explaining the Q1 2024 Public Debt Data,” saying the N24.33 trillion increase in the total debt was a result of a combination of fresh borrowing and naira devaluation.

The DMO noted that the exchange rate shifted from N899.39/$1 in Q4 2023 to N1,330.26/$1 in Q1 2024 which represents a depreciation of 32.39%, causing the naira value of external debt to rise sharply despite the actual dollar-denominated debt remaining relatively stable.


In Q1 2024, the total public debt in naira terms stood at N121.67 trillion, up from N97.34 trillion in Q4 2023.

The DMO explained that while the total external debt stock remained almost flat in dollar terms, the naira value surged due to the devaluation.


Since about N7.71 trillion was fresh borrowing, it means that about N16.62 trillion increase in total debt was due to naira devaluation.

This N16.62 trillion increase, combined with new domestic borrowing of N7.71 trillion, accounts for the total spike in Nigeria’s public debt stock.


The statement read: “Returning to the trend in the Total Debt Data between Q4, 2023, and Q1, 2024, the increase in Naira Terms of N24.33 trillion is being misinterpreted as New Borrowing. The amount actually represents New Borrowing of N2.81 trillion as part of the New Domestic Borrowing of N6.06 trillion provided in the 2024 Appropriation Act, New Domestic Borrowing of N4.90 trillion as part of the securitization of the N7.3 trillion Ways and Means Advances approved by the National Assembly, as well as, the depreciation in the official Naira Exchange Rate from USD/899.39 in Q4, 2023 to USD/N1,330.26 in Q1, 2024.

“Consequently, whereas, the Total External Debt Stock was relatively flat at USD42.50 billion and USD42.12 billion in Q4, 2023, and Q1, 2024 respectively, the Naira values were significantly different at N38.22 trillion and N56.02 trillion respectively, representing a difference of N17.8 trillion. This explains the perceived sharp increase of N24.33 trillion in the Total Debt Stock in Q1, 2024. The difference in the Exchange Rate for the two (2) periods also explains why in US Dollar Terms, the Total Debt Stock actually declined in Q1, 2024 (USD91.46 billion) when compared to Q4, 2023 (USD97.34 billion).”

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