The Nigeria’s total debt stock has risen from N32.9tn as of December 2020 to a total of N39.6tn as of November 2021
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, in her presentation of the 2022 approved budget, disclosed that the government borrowed N6.7tn between January and November 2021
The new borrowing in the period under review consists of N5.1tn domestic debt and N1.6tn. The domestic debt, however, includes borrowing from the Central Bank of Nigeria.
In March 2021, the Debt Management Office had disclosed that the country’s total public debt stock was stipulated as N32.9tn as of December 2020 and an additional N6.7tn loan means the total public debt stock would be about N39.6tn as of November 2021.
It was reported that in the 11-month period, debt servicing consumed a whopping N4.2tn which represents 76.2 per cent of the N5.51tn revenue generated during the period.
The minister took sides with the government borrowing and the country’s debt level, insisting the country had a revenue challenge, and not a debt problem, adding that the debt level is still within sustainable limits.
She had said, “This is to restate, that the debt level of the Federal Government is still within sustainable limits. Borrowings are essentially for capital expenditure and human development as specified in Section 41(1)a of the Fiscal Responsibility Act 2007.”
However, the former Deputy Governor of the Central Bank of Nigeria and former presidential candidate, Kingsley Moghalu, have countered the minister.
Moghalu had said, “There are many ways through which we can improve Nigeria’s domestic revenue situation without selling the future of our country. As to the argument that Nigeria does not have a debt problem but a revenue problem, that is mere sophistry. If you’re spending 90kobo of every one naira you earn repaying debt, you are insolvent.
“You cannot say that we have a debt-to-GDP ratio that allows you to continue borrowing. No! That is an argument for sustainable economies. You cannot be comparing Nigeria with advanced economies. We are in an economy that is still very basic.
“If you are not earning enough revenue, why are you borrowing? You are just compounding your problem. Why don’t you focus on where to get the revenue from instead of lazily ignoring that problem and just trying to survive with borrowing?
“If an individual was living a life that way, it would be a calamity. That is why Nigeria is in a calamitous situation today economically,” he said.
The World Bank had recently gave remarks saying Nigeria’s debt was vulnerable and costly, also stating that the country’s debt was at risk of becoming unsustainable in the event of macro-fiscal shocks.
