FOREIGN DEBT MANAGEMENT AND NIGERIA'S DEBT PROFILE 2015-2023: A CRITICAL ANALYSIS

Abstract

This study examined Nigeria's external and domestic debt management from 1980 to 2023, focusing on the implications of the country's increasing debt burden on its economic stability and development. By 1980, Nigeria’s external debt had reached nearly US$28 billion, largely accumulated under the import-licensing regime. The Federal Government’s domestic debt also accounted for a significant portion, representing about 60 percent of the total debt and approximately 10 percent of the country's health and education budgets. Despite efforts to reduce the debt burden, including during President Olusegun Obasanjo’s administration in 1999, Nigeria’s debt continued to rise, with a debt-to-GDP ratio reaching 38.6 percent by 2023. By June 2023, Nigeria's total public debt had surged to N87.38 trillion (USD 113.42 billion), comprising N54.13 trillion (USD 70.26 billion) in domestic debt and N33.25 trillion (USD 43.16 billion) in external debt. Although Nigeria experienced economic growth, persistent inflation, corruption, poor infrastructure, and ineffective policies hindered financial recovery, worsening the debt crisis. The study used a historical research design and qualitative descriptive analysis to assess Nigeria’s debt trajectory, analyzing secondary data from sources such as the Central Bank of Nigeria (CBN), the World Bank, and the Debt Management Office (DMO). The findings revealed that Nigeria's debt crisis was driven by an overreliance on borrowing, ineffective debt management practices, and inconsistent economic policies. Despite financial reforms and debt restructuring, their impact was limited due to systemic challenges. The study recommended the adoption of a comprehensive debt management strategy, focusing on reduced borrowing reliance, improved revenue generation, better governance, and investment in critical sectors such as healthcare, education, and infrastructure to ensure sustainable economic development.