In July 2023, credit extended to the Nigerian government experienced a 3.5 percent sequential rise, totaling N32.3 trillion, as compared to N31.2 trillion in June.
Increase in credit allocation to the private sector
The Central Bank of Nigeria (CBN) published these figures within its July Money and Credit Statistics report, highlighting a simultaneous increase in credit allocation to the private sector.
During the same period, credit extended to the private sector witnessed a growth of 2.3 percent, reaching N54 trillion from June’s N52.8 trillion.
Consequently, a net domestic credit expansion of 2.85 percent resulted, culminating in a total of N86.4 trillion in July, an upswing from June’s N84 trillion.
Although Nigeria’s total public debt had reached N49.85 trillion by the close of the first quarter of 2023, reflecting a N3.60 trillion uptick from December 2022’s N46.25 trillion, the Federal Government faced substantial debt servicing expenses. In February 2023, the government allocated N408.5 billion for this purpose.
As projected by the International Monetary Fund (IMF), both federal government external debt, including private sector debt, is anticipated to increase to $121.6 billion in 2023.
Meanwhile, the World Bank predicts that debt servicing will consume 123.4 percent of the Federal Government’s revenue within the same year.
It’s noteworthy that the 2023 Appropriation Bill ratified by the National Assembly assigned N6.55 trillion for debt servicing.
Furthermore, N8.32 trillion was allocated for recurrent expenditures, N5.97 trillion for capital expenditures, and a budget deficit of N10.78 trillion is intended to be funded through borrowing.
Looking ahead, stakeholders will convene during the CIBN Bankers’ Nite to deliberate on the potential implications of forex unification, a pivotal subject in the financial landscape.