Economy
Akabueze Raises Alarm Over Nigeria’s Worsening Debt-to-Revenue Ratio
By Adedapo Adesanya
The Budget Office of the Federation has told the incoming legislature, which approves the country’s borrowing needs, that Nigeria’s debt-to-revenue ratio is worsening and could spell doom if the country exceeds its limit.
The Director-General of the Budget Office, Mr Ben Akabueze, raised this alarm while addressing members-elect of the 10th National Assembly at their week-long induction ceremony in Abuja on Wednesday.
He pointed out that while Nigeria remains healthy with its debt-to-GDP ratio, the country is not with its debt-to-revenue ratio.
He said, “You may have heard that we have one of the lowest Gross Domestic Products-to-debt ratios in the world. While the size of the FG budget for 2023 created some excitement, the aggregate budget of all the governments in the country amount to about N30 trillion. That is less than 15 per cent in terms of ratio to GDP.
“Even on the African continent, the ratio of spending is about 20 per cent. South Africa is about 30 per cent; Morocco is about 40 per cent. And at 15 per cent, that is too small for our needs. That is why there is fierce competition for the limited resources.
“That can determine how much we can relatively borrow. We now have very limited borrowing space, not because our debt to GDP is high but because our revenue is too small to sustain the size of our debt. That explains our high debt service ratio. Once a country’s debt service ratio exceeds 30 per cent, that country is in trouble, and we are pushing towards 100 per cent, and that tells you how much trouble we are in.
He warned that the country now has limited space to borrow, and the remedy is to work towards boosting revenues.
“We have limited space to borrow. When you take how much you can generate in terms of revenue and what you can reasonably borrow, that establishes the size of the budget. The next thing would be to pay attention to the government’s priority regarding what project gets what.”
Mr Akabueze also stated that Nigeria should not be classified as an oil-rich economy.
“We are not even an oil-rich economy. To classify oil-rich economies, you talk of countries like Saudi Arabia, where there are 34 million of them and pump 10 million barrels of crude per day, or Kuwait, where there are 3 million of them and pump three million barrels per day,” he said
The Budget Office boss added that while Nigeria has a population of over 200 million, “we are currently pumping about 1.9 million barrels per day.”
Business Post fact check reveals that the country is currently producing under 1.6 million barrels per day.
He stressed, “So, we are not a rich economy and must resist the temptation. We are an oil-rich economy. Let me make it clear that we are potentially rich countries, but we are not.”
Mr Akabueze noted that Nigerians often say the country is not short of development plans but has a problem with implementation.
“I disagree because a plan that cannot speak to implementation is not a good plan,” he stated.
By Aduragbemi Omiyale
The Debt Management Office (DMO) on Monday allotted bonds worth N929.3 billion to investors from the N1.7 trillion bids it received from subscribers.
The exercise, which took place on Monday, July 20, 2026, was oversubscribed by market participants, reflecting the confidence investors have in the government’s ability to redeem the debt instrument on maturity.
On offer for sale for the July auction was N1.2 trillion worth of the FGN bonds, but the DMO allotted below this, despite receiving bids above the offer.
The papers were offered in 10-year, 15-year, and 20-year tenors, at N400 billion each.
For the decade-old note, investors staked N444.47 billion, but the debt office sold N245.73 billion at an 18.34 per cent coupon rate. For the one and a half-decade-old paper, bids valued at N518.00 billion were received by the DMO, with a non-competitive bid of N50.00 billion, with N302.13 billion allotted to investors at 18.40 per cent, and for the two-decade paper, the DMO got competitive bids of N665.19 billion and N381.46 billion was sold to bondholders at 18.35 per cent.
By Adedapo Adesanya
The Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso, disclosed that Nigeria’s external reserves had risen to $52.5 billion, enough to finance about nine months of imports.
He disclosed this on Tuesday at the end of the 306th meeting of the Monetary Policy Committee (MPC) held in Abuja, where the Monetary Policy Committee (MPC) retained the benchmark interest rate at 26.50 per cent as well as the standing facilities corridor at +50/-450 basis points around the MPR.
Similarly, the Cash Reserve Requirement (CRR) was maintained at 45 per cent for Deposit Money Banks, 16 per cent for Merchant Banks, and 75 per cent for non-Treasury Single Account (TSA) public sector deposits.
Speaking on FX developments, the central banker said at the $52 billion level, the country’s external reserves were significantly above the internationally recommended threshold of three months of import cover.
On the Naira exchange rate, Mr Cardoso said the foreign exchange market had deepened and was now operating on a transparent willing-buyer, willing-seller basis.
He said the apex bank remained committed to maintaining a liquid and functional foreign exchange market, adding that daily market turnover sometimes exceeded $1 billion.
According to him, the long-term stability of the naira would depend on key economic fundamentals, including increased oil exports, foreign direct investment, and improved domestic productivity to reduce dependence on imports.
He also added that the MPC welcomed the federal government’s renewed commitment to stronger policy coordination, particularly collaboration between fiscal and monetary authorities, which he said had helped reduce the impact of the Middle East crisis on the Nigerian economy.
Mr Cardoso said members of the committee also commended efforts to improve crude oil production and urged relevant agencies to intensify reforms in other sectors, including solid minerals, to boost government revenue.
On the regulatory forbearance granted to banks during the COVID-19 period, he reiterated that this had been discontinued because it had served its purpose.
According to him, the policy had “outlived its time” and was no longer necessary in assessing the health of the banking sector.
“Forbearance, we felt, had outlived its time. Many of you will recall this is something that came as a result of COVID. And now we are in 2026; we did not see the reason why that should continue to form part of the analysis of the banking system,” he said.
Mr Cardoso explained that banks had begun recalibrating their portfolios following the end of the policy, leading to a temporary reduction in outstanding risk assets.
He, however, assured that the development was part of a transition towards a stronger and more sustainable credit environment.
“It reflects a transition to a more sustainable and better quality credit environment, which is what we all want. We don’t want unanticipated shocks that come in a boom-and-bust fashion,” he said.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended its recent positive run by 1.17 per cent on Tuesday, July 21, triggered by appreciation seen in four bellwethers.
Leading the pack was FrieslandCampina Wamco Nigeria Plc, which added N12.00 to its value to close at N153.15 per share compared with the previous day’s N141.15 per share. NASD Plc appreciated by N1.90 to N36.00 per unit from N34.10 per unit, Food Concepts Plc improved by 23 Kobo to N2.48 per share from N2.25 per share, and Afriland Properties Plc grew by a marginal 1 Kobo to N15.01 per unit from N15.00 per unit.
As a result, the market capitalisation of the bourse increased by N30.40 billion to N2.637 trillion from Monday’s N2.606 trillion, and the NASD Security Index (NSI) gained 50.70 points to finish at 4,393.97 points, in contrast to the 4,343.27 points it ended a day earlier.
The unlisted securities exchange recorded a price loser yesterday, and it was Geo-Fluids Plc, which shed 1 Kobo to settle at N2.30 per share versus N2.31 per share.
During the trading day, the volume of securities traded by market participants on Tuesday dropped 99.4 per cent to 322,147 units from the previous day’s 52.6 million units, the value of securities dipped by 89.8 per cent to N19.4 million from the preceding session’s N191.2 million, and the number of deals contracted by 3.6 per cent to 27 deals from 28 deals.
Great Nigeria Insurance (GNI) Plc ended the day as the most traded stock by value on a year-to-date basis, with 3.4 billion units traded for N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units transacted for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 75.4 million units exchanged for N5.3 billion.
GNI Plc also closed the day as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units valued at N6.5 billion, and Resourcery Plc with 1.1 billion units sold for N415.7 million.
