The headline inflation rate increased to 25.80 percent in August driven mainly by food and non-alcoholic beverages which contributed 13.36 percent. This figure is 1.72 percent points higher when compared to the July 2023 headline inflation rate which was 24.08 percent.
On a year-on-year basis, the headline inflation rate was 5.27 percent points higher compared to the rate recorded in August 2022, which was 20.52 percent.
This is even as the nation’s total debt stock jumped to N87.38 trillion in the second quarter of 2023. This figure, according to the National Bureau of Statistics (NBS), represents an increase of 75.29 percent or N37.53 trillion compared to N49.85 trillion recorded at the end of March 2023.
The NBS said the debt includes the N22.71 trillion Ways and Means Advances of the Central Bank of Nigeria to the Federal Government.
According to the report, “Nigeria’s total public debt stock as at June 30, 2023, was N87.38 trillion ($113.42 billion). It comprises the total domestic and external debts of the Federal Government of Nigeria, the 36 states, and the Federal Capital Territory.”
It noted the major addition to the Public Debt Stock was the inclusion of the N22.712tn securitized FGN’s Ways and Means Advances as well as new borrowings by the Federal Government and the sub-nationals from local and external sources.
A breakdown of the debt stock showed that Nigeria has a total domestic debt of N54.13 trillion, representing 61.95 percent of the total debt, external debt is N33.25 trillion or 38.05 percent of the debt.
The Director-General of the DMO, Patience Oniha, had during a public presentation of the 2023 budget organised by the former Minister of Finance, Budget and National Planning, Dr Zainab Ahmed, noted that the debt would hit N70 trillion without N5 trillion new borrowing and N2 trillion promissory notes.
But the latest data showed that the current debt stock of N87.38 trillion exceeded the DMO’s projection by N10.38 trillion.
Reacting to the rise in the debt stock, Lead Director Centre for Social Justice (CSJ), Mr. Eze Onyekpere said, the rising debt is worrisome, but he also observed that the increase must have been because of the adjusted value of the naira viz a viz the foreign debts.
He 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.
According to him, “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.”
Also commenting, 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.