Debt
HighlightTop StoryTrending Story

Nigeria’s debt hits unsurpassed N41.6trn amid scheduled borrowing for 2023 budget

283

With the frightening debt profile of Nigeria over shooting N41.60 trillion incurred as of March 2022 amid plans to borrow more trillions to finance the 2023 budget, Nigeria has been listed among the 197 debtor-countries in the world by the World Bank.

According to a World Bank survey obtained by Persecondnews, of about 197 countries Nigeria is listed as number 195, beating only two countries –Yemen and Afghanistan.

“As at December 2020, the debt stock of Nigeria which includes the federal government, state governments and the federal capital territory was N32.92 trillion. By December 2021, it was N39.556 trillion. As at March of this year, it was N41.6trillion.

“On the average, Federal Government debt stood at about 85 percent of the total. Technically, the bulk of our debts is owed by the federal government.

“Debt has grown and that has come from the annual budget. There are 3 levels where those borrowings have increased. We have been running deficit budget for many, many years,’’ said the Director General of Debt Management Office, Ms. Patience Oniha.

She made the disclosure at the ongoing engagement on the 2023-2025 Medium Term Expenditure Framework (MTEF) and Fiscal Policy Paper (FSP) organized by the House of Representatives Committee on Finance and Appropriation chaired by Mr Abiodun James Faleke.

On why the debts have continued to mount, Oniha explained: Each time you approve a budget with a deficit, you approve it giving us a mandate, an authority to borrow and it will reflect in the debt stock, so debt stock will increase. Also remember that States are also borrowing, so we add their own. They also have laws governing their borrowings.

“The second leg to that really is that as debt stock increases, debt service will also increase. So, the clear message is for us to go through the budget because we have been having deficit budget for many years and have been borrowing significantly.’’

On the actual debt stock for the federal and subnational governments, the DMO DG said 85 percent of the total debt stock is owed by Federal Government while about 15 percent are owed by the State Governments and Federal Capital Territory (FCT).

“From the COVID period in 2020, the level of borrowing had increased significantly as you know. Those budgets pass through this House. The issue is how do we reduce that debt. One of it is the revenue which we have talked about.

“So, if revenue is high your deficit will be lower and new borrowing will be lower and then your new borrowing will be less and your debt stock will be lower and debt service to revenue will now be so high.

“The challenge is we have been borrowing because of shortfalls. The other thing to do is to look at our expenditure profile. What can we do to reduce it because you are asking me what is the remedy? It is coming from the budget.

“There is revenue, there is expenditure listed in various categories, personnel, overhead and capital. So, those are what bring out the deficit we borrow for. It is those things that should be interrogated in addition to increasing revenue significantly.

“Let me say that a World Bank report just show that in terms of debt to GDP ratio, Nigeria is low but for debt service to revenue ration, we are very high. So, if you look at tax to GDP ratio of these other countries, they are in multiples of Nigeria.

“The World Bank did a survey of about 197 countries and Nigeria is listed as number 195. That means we beat only two countries and these countries are Yemen and Afghanistan and I don’t think we want to be at those places,’’ Oniha stressed.

“We can’t talk about borrowing without talking about revenues and we can’t say why is the debt stock growing?

“It is growing because we are running deficit budget and some of you may be aware that we are also issuing promissory note to refinance arrears of government which also comes to the National Assembly for approvals,’’ she said

Leave a comment

Related Articles

NNPC Ltd. hosts NSC boss, pledges support for revitalization of Nigerian football

In a significant move to boost Nigerian football, the Nigerian National Petroleum...

Nigerian youths essential to repositioning Africa, says VP Shettima

Vice President Kashim Shettima has reaffirmed the federal government’s commitment to youth...

Just in: Simon Ekpa ‘ll be extradited to Nigeria to face charges – Defence Headquarters

The Nigerian Defence Headquarters, Abuja, has announced plans to extradite Simon Ekpa,...

NPA’s CEO Dantsoho Makes History as First Nigerian Chairman of PMAWCA

In a groundbreaking achievement, Dr. Abubakar Dantsoho, Managing Director of the Nigerian...

Just in: Senate confirms Omolola Oloworaran as DG PENCOM

The Senate on Thursday confirmed the nomination of Omolola Oloworaran for appointment...

Save for rainy day, Federal Accountant General urges state govts, emphasizes transparency, accountability

In a bid to ensure financial stability during adverse situations and economic...

Just in: Senate approves Tinubu’s $2.2 bln loan request

The Senate on Thursday approved President Bola Tinubu’s loan request of $2.2...

Just in: Reps reject bill for six-year single tenure for president, governors

The House of Representatives rejected a constitutional amendment bill on Thursday seeking...

Just in: Simon Ekpa, four others arrested in Finland over terror-related activities

Finnish-Nigerian separatist agitator, Simon Ekpa, and four others have been arrested in...

Sacked UNIZIK VC Odoh to Tinubu: You can’t fire me through press release

Sacked Vice-Chancellor of Nnamdi Azikiwe University (UNIZIK), in Awka, Anambra State, Prof....

UBA to empower MSME’s with wealth management strategies at its ‘Built to Last’ series

As part of its commitment to deepen the growth and sustainability of...

Olopade assumes office as NSC DG, promises new lease of life for Nigerian sports

Bukola Olopade had assumed office as the Director General of the resuscitated...

Amid High Inflation Rate, IMF Pledges Support for Nigeria’s Economic Reforms

International Monetary Fund (IMF) President Kristalina Georgieva and her team met with...

Nigeria’s Super Falcons Ajibade, Nnadozie, Nominated for 2024 CAF Women’s Player of the Year

The Confederation of African Football (CAF) has announced the nominees for the...

Just in: FG announces reshuffle of governing councils at FUOYE, Kogi varsity

The Federal Government has made changes to the governing councils of Federal...

Exclusive: Eguavoen Opens Up on Declining NFF Contract Extension, Reveals Reasons

Super Eagles Coach, Austin Eguavoen, has revealed why he declined the Nigeria...

Boost for Nigeria’s Oil Production As NNPC’s Utapate Crude Grade Hits Global Oil Market

In a major boost for Nigeria’s crude oil production, revenue generation, and...

Just in: FG sacks Nnamdi Azikiwe University VC

The Vice-Chancellor of Nnamdi Azikiwe University, Awka, Anambra State, Prof. Bernard Odoh,...

Just in: FG sacks varsity Pro-Chancellor for misconduct

The Minister of Education, Dr. Tunji Alausa, has announced the removal of...

Just in: INEC presents Certificates of Return to Ondo Gov. Aiyedatiwa, deputy

The Independent National Electoral Commission (INEC) has presented Certificates of Return to...