Rising public debt profile in Nigeria: risks and sustainablity issues
The recent surge in the debt profile of the federal and state governments has echoed new concerns for policy stakeholders in Nigeria. Although debt is important for economic growth, the size of the debt is important for sustainability. Despite the “green light” signal that Nigeria has more fiscal room for accumulating more public debt, our analyses show that Nigeria's debt is fast rising and could approach unsustainable level given the low revenue and export profiles. In this Policy Brief, we traced recent trends in Nigeria's debt profile and explored the various sustainability assessment indicators to gauge the possibility of impending risks in the near term. The report sets out with the review of studies on debt and economic growth nexus and also narrows down on the implications of various issues unfolding in the public debt structure in Nigeria. As a way forward, government should increase the share of concessional loan in external debt stock and develop Public-Private Partnership (PPP) Framework for financing infrastructure projects.