The Federal Government (FG) is set to borrow an additional N6.39 trillion to fund Nigeria’s 2022 budget deficit. This is according to the Debt Management Office (DMO).
In a document cited by BizWatch Nigeria, Director-General (DG), DMO, Patience Oniha disclosed that the overall deficit in the 2022 budget was N6.30 trillion, which represents 3.46% of the country’s Gross Domestic Product (GDP).
The DMO boss said the budget deficit was to be financed mainly by borrowings from both domestic and foreign sources, as well as privatisation proceeds.
“N2.57 trillion will come from domestic sources, N2.57 trillion from foreign sources, N1.16 trillion from multilateral and bilateral loan drawdowns, and N90.7 billion from privatisation proceeds.
“Recurrent (non-debt) spending, estimated to amount to N6.9 trillion, is 40% of total expenditure and 20% higher than the 2021 budget.
“Aggregate capital spending of N5.96 trillion is 35% of total expenditure,’’ she added.
Nigeria’s public debt stock rose to N39.556 trillion or $95.779 billion as of December 31, 2021.
The total debt, which includes both external and domestic debts of the Federal Government, the 36 state governments, and the Federal Capital Territory (FCT), is N6.64 trillion higher than the N32.915 trillion or $86.392 billion on December 31, 2020.
Meanwhile, the DMO had explained that Nigeria was not bothered about China’s decision to cut its lending to Africa for different reasons, amongst which is the fact that the continent’s most populous country is diversifying her sources of funding.
Allaying the fears that emanated from the announcement from the Chinese government that it would cut the headline amount of money it supplies to Africa by a third to $40 billion in the next three years, Oniha said Nigeria explores other sources of funding.
“If China doesn’t give us money, what happens?” the DMO boss queried, as she revealed that “the first part is that we are diversifying our sources of funding so we’re not dependent on just one source, whether in the external borrowing or domestic.”
“The second thing really is to say that the debt from China is probably about $3.6 trillion, and is just about 10 percent of our external debt; when you compare to the total debt, that’s probably at about three percent.
“Therefore, what I’m saying is: we like them, we can see the airports, we can see the rail, but really, they’re not the major source of our funding,” she added.
