The state of the nation’s national economy continue to worry stakeholders as Nigeria’s total debt, that is, federal government, the 36 states of the federation and the federal capital territory has risen to N39.556 trillion or $95.779 billion as at December 31, 2021.
The amount represents the total external and domestic debts of the federal government. The debt stock grew by N6.641 trillion (from N32.915 trillion or $86.392 billion at 31 December, 2020 to N39.556 trillion in 2021), Director-general of the Debt Management Office (DMO), Ms Patience Oniha made the disclosure yesterday at a media briefing in Abuja.
Oniha said the trend is coming from the consecutive years of borrowing. The new figure is not inclusive of the about N10 trillion accumulated Central Bank of Nigeria’s ways and means to the federal government. Oniha said the authorities are still in the process of converting the overdraft. The ongoing amendment to the 2022 budget may increase the level of new borrowing in 2022.
The suspicion of an expanded budget deficit, occasioned by moves by the federal government to borrow extra N2.2 trillion to finance fuel subsidy regime creates the fear that the debt level would rise geometrically this year.
Nigeria’s debt service to revenue is 33.4 per cent. She said the debt service to revenue is high because Nigeria is borrowing to augment for the shortfall in revenues.
In justification for the rising debt stock, Oniha said “debt is growing because we have huge infrastructure deficit and we have low revenue base.” The debt stock for December 31 includes new borrowings by the central government and the sub-nationals.
Under the 2021 appropriation and supplementary Acts, government borrowing– from domestic and external sources -was N5.489 trillion to part finance the Deficit.
Borrowings for this purpose and disbursements by multi-lateral and bi-lateral creditors account for a significant portion of the increase in the debt stock. Increases were also recorded in the debt stock of the States and the FCT.
The New Borrowings were raised from diverse sources, primarily through the issuances of the Eurobonds, Sovereign Sukuk and FGN Bonds.
“These capital raisings were utilized to finance capital projects and support economic recovery,” Oniha said.
Based on the new figure, the nation’s external debt now stands at N15.855 trillion (federal government: N13.885 trillion, States: 1.970 trillion. On the flip side, the total domestic debt now stands at N 23.701 trillion.
