Financial experts have raised concerns over Nigeria’s external and domestic debts which have, as at December 31, 2021, risen to N39.556 trillion ($95.779 billion), from N32.915 trillion ($86.392 billion) it was on December 31, 2020.
Investors King gathered that a recent disclosure by the Debt Management Office (DMO), revealed that Nigeria’s public debt stock for December 31, 2021 includes new borrowings by the Federal Government and the sub-nationals.
While addressing newsmen, Director General of the DMO, Patience Oniha revealed that total public debt stock to Gross Domestic Product (GDP) as at December 31, 2021, stood at 22.47 percent, while the Debt-to-GDP 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 the World Bank and the International Monetary Fund (IMF) for countries in Nigeria’s peer group, as well as, the ECOWAS Convergence Ratio of 70 percent.
“The Federal Government is mindful of the relatively high Debt-to-Revenue Ratio and has initiated various measures to increase revenues through the Strategic Revenue Growth Initiative and the introduction of Finance Acts since 2019”, she added. Oniha further noted that revenue generating agencies need to be more prudent in their spending so as to free money for the Federal Government to meet various needs.
“We make it look like borrowing is a crime and we give it the toga it doesn’t deserve. We’ve seen debt levels rising not only in Nigeria but all over. COVID-19 is a result of the upward trajectory. All governments borrow. But we need to increase revenue generation”, she added.
She also recalled that the 2021 Appropriation and Supplementary Acts included total new borrowings (from domestic and external sources) of N5.489 trillion to partly finance the deficit.
“Borrowings for this purpose and disbursements by multilateral 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”, she said.
Reacting to this development, Chairman, Manufacturers Association of Nigeria (MAN), Apapa branch, Frank Onyebu noted that interest payment on the nation’s debt is almost more than what is available for development.
“No country can develop that way. Sometime ago there were reactions that the borrowing was too much, but some other people were of the view that the country has not borrowed enough, now it has gone out of control”, he lamented.
According to him, the Federal Government needs to restrategise and get technocrats who know how to manage the nation’s economy.
