Nigeria’s Debt to Increase to N77tn if Senate Approves Ways And Means Advances

The Debt Management Office has confirmed that Nigeria’s public debt burden will hit N77tn if the National Assembly approves the request by the President Muhammadu Buhari to restructure the Ways and Means Advances.

Investors King yesterday reported that President Buhari had urged the National Assembly to reconsider their decision on the Ways and Means Advances, a loan facility through which the Central Bank of Nigeria finances the shortfalls in the government’s budget.

The Director-General of the Debt Management Office, Patience Oniha disclosed this during the public presentation of the 2023 budget organized by the Minister of Finance, Budget and National Planning, Dr Zainab Ahmed.

She, however, noted that the debt would be N70tn without N5tn new borrowing and N2tn promissory notes.

Oniha said, “The DMO released the figure for the country’s debt stock as at September, you don’t expect it to be significantly different from December. Secondly, there are a lot of discussions on the Ways and Means. In addition to the significant costs saving in loans service we would get by securitizing it.

“There is an element of transparency in the sense that it is now reflected in the public debt stock. Once it is passed by the National Assembly, it means we will be seeing that figure included in the public debt. You will see a significant increase in public debt to N77tn.”

She said while the debt is growing because there is new borrowing, revenue is receiving significant importance.

Investors King understands that the Federal Government spent N5.24tn servicing debts in 2022 as pronounced by the Finance Minister.

The National Assembly had earlier rejected the request of President Buhari to restructure the Way and Means Advances after the President had written to them in a statement titled: ‘Restructuring of Ways and Means Advances’.

Meanwhile, the World Bank had its latest Development Update released in December warned that interest payments on the federal government’s borrowing from the CBN would gulp about 62 per cent of government revenue by 2027 despite the restructuring plan.