Nigeria’s incoming President-elect, Asiwaju Bola Ahmed Tinubu, faces a significant economic challenge as he prepares to take office on May 29, 2023.
Reports from the Debt Management Office (DMO) reveal that Tinubu will inherit a staggering debt profile of N46.25 trillion from past administrations, excluding the N369 billion loan approval the incumbent government received from the World Bank to cushion the effect of fuel subsidy removal scheduled for implementation in June 2023.
The country’s debt profile has grown exponentially in the past eight years, with the Buhari administration accounting for a significant portion of this increase, News About Nigeria reports.
The DMO states that Nigeria’s total debt stock has skyrocketed from N12.6 trillion in 2015 to N46 trillion in 2023. The situation has sparked concerns about Nigeria’s economic stability and sustainability, especially after the IMF’s warning that Nigeria almost emptied its treasury on debt servicing in 2022.
Although Nigeria’s revenue collection has shown some progress, with the Federal Inland Revenue announcing that it collected N10 trillion in revenue in 2022, this is not enough to offset the country’s significant budget expenditure of N21.83 trillion, which is pegged on deficits of N11.34 trillion.
The onerous task of surmounting Nigeria’s economic challenges falls on Tinubu’s shoulders after his swearing-in on May 29, 2023. Economic experts have suggested loan renegotiation as a viable option for the incoming government, provided the government has credibility.
Despite this, Tinubu and his administration must approach the country’s economic challenges with practical and innovative solutions. There is a need for a comprehensive approach to addressing Nigeria’s debt burden and economic instability, which has continued to strangle the country’s growth and development.
Tinubu’s administration must prioritize addressing Nigeria’s debt burden and implementing viable economic policies to set the country on a path towards sustainable economic growth. Failure to do so could result in significant economic challenges and hinder the country’s development.
