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Nigeria's public debt is projected to reach N130 trillion this year, raising concerns about the country's debt-to-GDP ratio.
The domestic debt includes N44.8 trillion in Federal Government bonds, N20.3 trillion in Treasury bills, and N12.4 trillion in other domestic debts.
The external debt is made up of N14.3 trillion from multilateral creditors, N10.9 trillion from bilateral creditors, and N19.0 trillion from commercial creditors.
The 2024 budget is based on 'overly optimistic' revenue assumptions, which could lead to a repeat of the historically disappointing budget performance.
"The projected 43.9 per cent share of revenue from oil and other minerals is unrealistic," the report stated.
Afrinvest's assessment of the 2023 actual budget showed a sustained underperformance, with actual revenue exceeding the budgeted amount by 7.6 per cent to N11.9tn.
Aggregate expenditure rose by 31.8% to N18.8tn, leading to a higher deficit of N46.9tn. The Federal Government's debt accounted for 89.7% of total public debt stock, reaching N487.3tn.
The Federal Government's borrowing plan could negatively impact banks' deposits due to attractive yields on risk-free papers.
Banks may face heightened risks of asset deterioration due to consumption-tilted budgetary patterns.
The CBN's actions to streamline Bureau De Change operations have improved compliance, but the weak forex reserve limits the ability to meet market demand.
Exploring alternative forex sources and revitalising traditional inflow sources are recommended to achieve sustainable forex market stability.
