Nigeria’s headline inflation hits 25.80%

The headline inflation rate increased to 25.80 per cent in August driven mainly by food and non-alcoholic beverages, which contributed 13.36 per cent. This figure is 1.72 per cent points higher when compared to the July 2023 headline inflation rate, which was 24.08 per cent.

On a year-on-year basis, the headline inflation rate was 5.27 per cent points higher compared to the rate recorded in August 2022, which was 20.52 per cent.

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 (CBN) 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 that the major addition to the Public Debt Stock was the inclusion of the N22.712 trillion securitised Federal Government’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, observing that the increase must have been because of the adjusted value of the naira vis-a-vis the foreign debts.

He stated that “even at that, we are still borrowing,” adding that the government should be very cautious about how it incurs debt and to what use it puts the money it borrows.

“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 per cent of that money was invested in capital projects, we won’t be where we are today,” he stated.

Also commenting, an economic analyst, Prof. Jonathan Aremu, said though he does not have details of the 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 would be more worrisome if the monies borrowed were not put into productive activities but for consumption, adding that the government should be very careful about borrowing.