CLAIM: Nigeria’s Debt-to-GDP Ratio Is Currently At 23%, Says Finance Minister, Zainab Ahmed

Olakunle Mohammed 

On Wednesday, April 14, Nigeria’s Minister of Finance, Budget and National Planning, Zainab Shamsuna Ahmed, stated that the country’s debt is currently at about 23% to GDP.

According to report from several news platforms, Ahmed stated this while replying to the claims made by Edo State Governor, Mr. Godwin Obaseki that N60 billion was printed by the Central Bank of Nigeria (CBN) to augment the amount distributed to states at the Federation Account Allocation Committee (FAAC) meeting in March 2021. 

While responding to questions from State House correspondents, after last Wednesday’s Federal Executive Council (FEC) meeting, the Finance Minister denied Obaseki’s comment. 

She said: “The issue that was raised by the Edo State Governor for me is very, very sad. Because it is not a fact. What we distribute at FAAC is revenue that is generated and in fact distribution revenue is public information.

“We publish revenue generated by FIRS, the customs and the NNPC and we distribute at FAAC. So, it is not true to say we printed money to distribute at FAAC, it is not true.

“On the issue of borrowing, the Nigerian debt is still within a sustainable limit. What we need to do as I have said several times is to improve our revenue to enhance our capacity to service not only our debt but to service the needs of running government on a day to day basis.

“So, our debt currently at about 23% to GDP is at a very sustainable level. If you look at all the reports that you see from multilateral institutions.”


The minister made several claims during the press briefing to state house correspondents, however, N-VA extracted the claim, “Nigeria’s Debt-to-GDP Ratio Is Currently At 23%” and went on to fact-check it. 


The finance minister made the claim at a time when Nigerians and economists are worried about Nigeria’s Debt burden and how to sustain it, which makes it imperative to verify the debt-to-GDP. 

Governor Obaseki’s recent comment that the CBN was printing money to augment national revenue also makes it worrisome for economics experts warning of the dangers of going that route when there is no asset to back the minting and growing debt profile. Hence, why it is important to verify the debt-to-GDP figures stated by the minister. 

Nigeria exited recession in January 2021 while the general inflation rate and food price inflation has been constantly rising since August 2019, according to NBS aggregated data. The current  state of Nigeria’s economy is enough reason to fact-check claims gauging Nigeria’s ability to repay its debt.


What is Debt-to-GDP Ratio?

Debt-to-GDP ratio expresses the ratio of a country’s debt to its gross domestic product (GDP). This is often represented as a percentage and used to gauge a country’s ability to repay its debt. 

A high debt-to-GDP ratio is undesirable for a country, as a higher ratio indicates a higher risk of default or servicing. In a study conducted by the World Bank, a ratio that exceeds 77% for an extended period of time may result in an adverse impact on economic growth.

What is Nigeria’s Debt Profile?

According to the Debt Management Office (DMO) report, Nigeria’s Total Public Debt Portfolio as at December 31, 2020 was 86.393 billion in dollars and 32.92 trillion in naira.

The debt profile increased in Q4 2020 when compared to the Q3 report showing N32.223 trillion or USD84.574 billion.

What is Nigeria’s GDP?

According to the National Bureau of Statistics (NBS), Nigeria’s aggregat Gross Domestic Product (GDP) as at Fourth Quarter (Q4) 2020 stood at 43,564,006,290,000 trillion naira in nominal terms. In the same year, the real GDP was pegged at N19.55 trillion.

Nigeria’s GDP in Q2 and Q3 of 2020 dropped to over nine percent, at the time, the country was in economic recession.

What is Nigeria’s Current Debt-to-GDP Ratio?

According to the International Monetary Fund (IMF) Data Mapper, Nigeria’s current debt-to-GDP is 31.9%, however as at December 2020, same ratio was pegged at 35.1%.

The IMF data was corroborated by Statista, which states that Nigeria’s debt-toGDP ratio was 34.98% as at 2020.

Is Nigeria’s Current Debt-to-GDP Ratio Sustainable?

The minister stated that Nigeria’s Debt-to-GDP ratio is at a very sustainable level. A look at the  Debt-to-GDP quoted by the minister and the one revealed by our fact-check told different stories. 

However, N-VA reached out to Aderemi Ojekunle, a Data journalist with Dataphyte Nigeria to ascertain if Nigeria’s current Debt-to-GDP ratio is at a sustainable level. 

He said: “Nigeria’s debt to gdp profile is currently within band, compared to peers in Africa, that is why the government focuses more on domestic debt. 

“Data tells us that the domestic side of the debt constitutes about 60% of the total public debt as at 2020.”

Ojekunle stated further that there are concerns of huge fiscal deficits and the sluggish growth of the nation’s economy as the overall revenue is insufficient to cater for budget implementation and other infrastructures.

The data journalist mentioned that for Nigeria’s debt profile to be more sustainable, the government needs to raise taxes as the IMF stated that Nigeria’s tax revenue base is low. Ojekunle also reiterated that Nigeria needs to cut government spending as the system is expensive to run, and a moderate cut will help achieve high returns.


The claim made by the Finance Minister that the country’s debt is currently at about 23% to GDP is FALSE as multiple data sources shows that it is at 35%. But, the minister’s conclusion that the ratio is sustainable is MISLEADING as data shows that Nigeria’s current economic variables are insufficient.  


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