By Bassey Udo
Nigeria’s public debt rose to N39.55 trillion as at December 31, 2021, the Debt Management Office (DMO) has said.
The Director-General of DMO, Patience Oniha, told reporters on Thursday in Abuja that the country’s debt represented the total external and domestic debts of the Federal Government, the 36 states of the Federation, and the Federal Capital Territory (FCT), Abuja.
The country’s total debt portfolio as at September 30, 2021, as published by the DMO on its website, stood at N38.005 trillion ( about $92.63 billion).
But the DMO DG said the rise in the country’s public debt included new borrowings by both the Federal Government and state governments.
“For the Federal Government, it would be recalled that the 2021 Appropriation and Supplementary Acts included total new borrowings of N5.48 trillion to part-finance the deficits.
In the 2022 Fiscal Appropriation Act, out of total budget deficit of N6.39 trillion, the Federal Government indicated that the financing would be mainly by borrowings, consisting N2.57 trillion each from domestic and foreign sources respectively, N1.16 trillion from multi-lateral and bi-lateral loan drawdowns, in addition to N90.7 billion from privatization proceeds.
Oniha said borrowing for the purpose of offsetting the budget deficit, and disbursements by multilateral and bilateral creditors account for a significant portion of the increase in the debt stock.
The new borrowings, the DG said, were raised from diverse sources, including issuance of Eurobonds, Sovereign Sukuk and Federal Government of Nigeria (FGN) Bonds.
“These Capital raisings were utilised to finance capital projects and support economic recovery,’’ she said.
Despite criticisms by Nigerians about the country’s rising debt stock, which many say amounts to mortgage the country’s economic future, Oniha insisted the country’s debt situation was within reasonable limits.
However, she said the Federal Government had taken concrete steps to address country’s revenue challenges which made servicing of the debts burdensome.
“With the total Public Debt-to-Gross Domestic Product ratio of 22.47 percent, the debt ratio still remains within Nigeria’s self-imposed limit of 40 percent.
“This ratio is prudent when compared to the 55 percent limit advised by both the World Bank and the International Monetary Fund (IMF) for countries in Nigeria’s peer group.
“The Federal Government is mindful of the relatively high Debt-to-Revenue ratio and has initiated various measures.
“The measures are to increase revenue through the Strategic Revenue Growth Initiative and the introduction of Finance Acts since 2019,’’ she said.
Early this month, the Chairman of the Nigerian Governors’ Forum and Governor of Ekiti State, Kayode Fayemi, said on more than three occasions the Nigerian National Petroleum Company Limited, one of the country’s main revenue agencies, has been making zero contribution to the Federation Account.
The inability of the NNPC to meet its obligation to the Federation has exposed the country to serious stress and strain, as the government has to resort to huge borrowings to finance its programme of infrastructure development.
