Claim: Nigeria spent N3.63 trillion on debt servicing between January and December 2022.
Verdict: Missing context. While Nigeria paid off N3.63 trillion debt in 2022, the country’s total public debt stock has risen to N46.25 trillion ($103.11 billion), according to data from the Debt Management Office (DMO).
A few weeks to the end of his second-term presidential bid, President Muhammadu Buhari and his communications team have spoken highly of the administration’s achievements.
Recall that in December 2022, during a meeting with the Secretary General of the Abu Dhabi Forum, Sheikh Al-Mahfoudh Bin Bayyah, and his deputy, Pastor Bob Roberts of the United States, Mr Buhari said he had tried his best to solve Nigeria’s challenges as president.
In a statement by Garba Shehu, Senior Special Assistant to the President (Media & Publicity), Mr Buhari said, “…We will continue to solve our problems, especially as they relate to the youth. We are big in size and population, facing many challenges, but in many areas, we are trying. In seven-and-a-half years, I have done my best.”
He also reiterated the claim in January 2023 when he noted that he had served Nigeria to the best of his ability, emphatically stating that he had not disappointed anyone.
During the presidential election campaign, the president-elect, Bola Tinubu, promised to build on the current administration’s legacy.
Supporters of Mr Buhari and the All Progressives Congress (APC) on social media are also not left behind. They have continually taken to their pages to extol Mr Buhari’s achievements. One of them is a Twitter user – Imran Wakili Oluwafemi @IU_Wakilli – who has consistently praised the president in his tweets, here, here, and here.
On April 10 2023, the user tweeted that Nigeria paid off N3.63 trillion debt between January and December 2022, wondering why such news about Mr Buhari would not trend. As of the time of writing this report, the tweet had been viewed more than 298,000 times.
Some Nigerians have questioned the claim’s authenticity, urging DUBAWA to conduct a fact-check.
Nigeria’s debt profile: Putting the right context
Nigerians and other economic experts have expressed concern over the country’s rising debt profile under Mr Buhari’s administration.
The outgoing president has been severely criticised for his administration’s penchant for loans, particularly external ones.
An analysis by Premium Times shows that external debt under Mr Buhari has grown three times more than the combined figure recorded by the past three administrations.
While the Obasanjo government met $28 billion as foreign debt in 1999, it left $2.11 billion in 2007 after successfully securing a write-off by the London and Paris clubs of foreign creditors.
The Yar’adua/Jonathan government added $1.39 billion to what they met. The Jonathan government also incurred an additional $3.8 billion, taking the country’s total foreign debt to $7.3 billion when that administration ended in 2015.
Nigeria’s external loan reached $28.57 billion by December 2020, meaning an extra $21.27 billion had been accumulated under the Buhari administration — three times the combined amount by past governments since 1999.
While the Nigerian government consistently explained the loans were to help facilitate the execution of some projects, critics opined that the loans could compromise the country’s sovereignty.
According to a report by the United Nations Conference on Trade and Development (UNCTAD), external debt burdens expose developing countries like Nigeria to higher risk profiles of debt contracts, for example, shorter maturities and more volatile financing costs as to sudden reversals of private capital inflows. It also noted that external debt burdens deemed sustainable by international creditors could quickly become unsustainable for developing nations in cases of unforeseen contingencies.
Meanwhile, a report by Cogent Economical and Finance noted that public debts (both domestic and external) could have positive impacts on the economy of the debtor nation. The authors argued that domestic debt significantly impacted long-term growth while its short-term effect was negative. On the other hand, external debt constituted an impediment to long-term growth, while its short-term effect was growth-enhancing.
Conclusively, the study suggested that the government should direct the borrowed funds to the diversification of the productive base of the economy.
Data from the Debt Management Office (DMO) showed that Nigeria spent $2.4 billion on servicing external debt from January to December 2022. The Central Bank of Nigeria’s exchange rate of US$1 to NGN448.08 was used to convert the $2.4 to N1.07 trillion.
The country paid off $618.6 million on servicing multilateral debts from the International Monetary Fund, African Development Bank, International Fund for Agricultural Development, African Development Fund, Africa Growing Together Fund, International Development Association, European Development Fund, Arab Bank for Economic Development in Africa and the Islamic Development Bank.
On Bilateral debts, the country spent $336.5 million and $1.45 billion for Commercial debts within the same period.
On Domestic Debt servicing, FG repaid N668.6 billion from January to March 2022, N664.7 billion from April to June, N820.5 billion from July to September and N406.7 billion from October to December 2022. The FG spent N2.56 trillion on domestic debt servicing from January to December 2022.
However, the total public debt stock of both the Federal and state government(s) stood at N46.25 trillion ($103.11 billion) at the end of December 2022, according to data from the DMO. While the Domestic Debt Stock was N27.55 trillion, the external debt stock was N18.70 trillion. This significantly increased from N39.56 trillion ($95.77 billion) in December 2021.
The data shows that the country indeed paid off N3.63 trillion in domestic and external debt stock as of December 2022. Still, available records showed the country incurred another extra debt of N6.69 trillion between January to December of the same year, going by the difference between the total debt stock at the end of 2021 and 2022.
In a press release issued on March 30, 2023, the DMO explained that the debt stock had increased due to new borrowings by the Federal and state governments “to fund budget deficits and execute projects”.
Although the Nigerian government spent N3.63 trillion on debt servicing from January to December 2022, data from the DMO showed that the country acquired an extra N6.69 trillion in debt within the same period. The Twitter user who made a claim had not given sufficient information.