Between January 2022, and March 11, the Federal Government (FG) has been able to secure a N950 billion new domestic borrowing. This is according to the Debt Management Office (DMO).
In the presentation of the Public Debt Data as of December 31, 2021, the Director-General (DG) of the DMO, Patience Oniha stated that the loan was pertinent to the economy, adding that the President Muhammadu Buhari-led government is considering other options to raise funds externally.
“All options for raising funds externally are being considered. These include funding from multilateral and bilateral sources, the International Capital Markets and the $3.35 billion Special Drawing Rights allocated by the International Monetary Fund to the Central Bank of Nigeria,” Oniha said.
As presented, the DMO boss further disclosed that the government still plans to borrow an additional N1.6 trillion, while the 2022 debt target for domestic borrowing is N2.57 trillion.
More so, there’s a plan to borrow N2.57 trillion from foreign creditors, while N1.16 trillion is expected from multilateral/bilateral drawdowns.
BizWatch Nigeria, however, understands that going by the National Development Plan 2021-2025, the government hopes to push the total debt stock to N46.63 trillion for 2022.
Experts’ sentiment on Nigeria’s debt stock
Nigeria’s debt portfolio had since attracted interest from international bodies, financial institutions, and economic experts, with many of them chastising the Buhari government on its borrowing spree.
Speaking on the development, an economist and Chief Executive Officer (CEO) of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said the country is on the brink of debt distress.
His words: “Nigeria is on the brink of debt distress because our debt profile now is not sustainable. We had a debt service to revenue ratio getting to 76% as of November last year. The situation is likely to get worse because our deficit in the 2022 budget is N6.4tn, and we need to borrow to finance the deficit.
Also, the Federal Government has submitted a supplementary budget proposal for subsidy for N2.55 trillion after the budget was passed. Adding that to the deficit, we will get about N9 trillion.
“How much is the revenue? It is just about N10.7 trillion, and we are not likely to get the full revenue, maybe 70%. So, we are getting to a point whereby the time we service our debts, which should be around N4tn, and spend another N4 trillion on subsidy this year, we have consumed almost all our revenue for the year.
Does that now mean that we are going to be using debt for personnel costs?; for overhead?; for capital budget? That is where we are heading to.”
