The Institute of International Finance, a global trade organization, said that in the second quarter of 2023, the total amount of global debt reached a record $307 trillion.
The Punch reported that the record was set, according to IIF, despite increases in interest rates across the board, with markets including the US, Japan, UK, and France driving the climb.
This occured after the National Bureau of Statistics reported that Nigeria’s public debt stock, which includes both domestic and external debt, increased by 75.27 percent, or N87.38 trillion ($113.42 billion), from N49.85 trillion ($108.30 billion) in Q1 2023 to N87.38 trillion ($113.42 billion) in Q2 2023.
In Q2 2023, Nigeria’s total domestic debt was N54.13 trillion ($70.26 billion) while its total external debt was N33.25 trillion ($43.16 billion).
The group’s global debt monitor report which was released on Tuesday, revealed that the amount of debt in the globe increased by $10 trillion in the first half of 2023 and by $100 trillion in the previous ten years.
The latest increase, according to the report, has increased the global debt-to-GDP ratio to 336 percent for the second consecutive quarter. The debt ratio had been decreasing up until 2023 for seven quarters.
According to the research, the debt ratio increase was caused by slower growth combined with a slowdown in price rises.
According to the IIF, the primary cause of the debt ratio’s steep drop during the previous two years was the unexpected increase in inflation.
The group stated that it expects the debt-to-output ratio to exceed 337 percent by the end of 2023 as wage and price pressures have moderated, albeit not to their targets.
“Our concern is that countries will have to set aside an increasing amount of money for interest costs. Emre Tiftik, the report’s principal author, predicted that it would affect nations’ funding costs and debt dynamics in the long run.”
Prior to significant interest rate increases by central banks around the world to combat inflation, the previous high point for global debt occurred in early 2022.
The Central Bank of Nigeria’s Monetary Policy Committee has continuously increased the MP rate in Nigeria as a result of the country’s persistent inflation, which was 25.80% in August 2023.
Lagos State had the greatest domestic debt at the subnational level in Q2 2023 with N996.44bn, followed by Delta with N465.40 billion. Jigawa State, at N43.13 billion, has the lowest internal debt, followed by Kebbi, with N60.94 billion.
Lagos State, with $1.26 billion, had the biggest external debt, followed by Kaduna with $569.38 billion. Taraba State had the most external debt ($21.92 million), followed by Borno State ($18.75 million).
