The Centre for the Study of the Economies of Africa (CSEA), a leading economic research firm with focus on African economies’ performances, has projected an upsurge in Nigeria’s public debt in the months ahead in view of the limited fiscal space of the government.
The research firm, in its just published ‘Nigeria Economic Update Issue No 23’ sourced by BRTNews,ng, while partly attributing the rising debt profile to the impact of the COVID-19 pandemic on the economy, noted that although the decline in foreign debt stock would reduce exchange rate risks, the exclusion of the private investors in the domestic debt market remains undesirable for the nation’s improved fiscal system.
The CSEA recalled that the total public debt increased by 1.08 percent from US$86.4 billion (about N32.9 trillion) in Q4, 2020 to US$87.2 billion ( about N33.1 trillion) in the first quarter of 2021, with domestic debt accounting for 61.4 percent of total debt which increased by 2.5 percent, while foreign debt decreased by 1.5 percent within the review period.
It further noted that the increase in public debt was on the back of shortfalls in government revenue owing to the effects of the pandemic.
The firm stated: “Although the decline in foreign debt will reduce exchange rate risks, finding recourse in domestic debt excludes private investors from the debt market.
“Going forward, public debt is expected to continue rising, taking into consideration the limited fiscal space of the government”, the CSEA projected.
