The Federal Government’s thirst for debts appears to have deepened as new borrowing allocations rose by 278.03 per cent or N4.03tn between 2015 and 2021, The PUNCH has learnt.
This was disclosed in the presentation of the public debt data as of December 31, 2021, by the Director-General of the Debt Management Office, Patience Oniha.
According to the document, the new borrowing allocation for 2015 was N1.46tn, which was 90.17 per cent of the N1.62tn budget deficit.
For 2021, the allocation for new borrowing was N5.49tn, which was 85.11 per cent of the N6.45tn budget deficit.
On the source of the figures, the document read in part, “2015 comprises 2015 Appropriation Act and supplementary budget of N575bn for the same year. 2021 comprises 2021 Appropriation Act and supplementary budget of N802bn for the same year”.
The document further identified issues around the public debt level, which include fast-growing debts, high Debt Service to Revenue Ratio, and concerns around the use of proceeds from the debts.
However, the DMO DG tried to justify the reason for the increase in public debt levels, which, according to her, is due to the country’s huge infrastructure deficit, recession, consecutive budget deficits, and low revenue base.
The World Bank has said Nigeria’s debt, which may be considered sustainable for now, is vulnerable and costly.
According to the Washington-based global financial institution, the country’s debt is also at risk of becoming unsustainable in the event of macro-fiscal shocks.
The PUNCH had reported that the Federal Government incurred N950bn new domestic borrowing between January 2022 and March 11, 2022.
Also, the Federal Government plans to add N6.3tn new debts to the current debt stock, which would push the country’s total debt stock to N45.86tn by December 2022.