Debt Burden: Nigeria’s DMO tasks incoming administration on improved revenue generation, economy

*The Debt Management Office tasks the incoming administration of Asiwaju (Sen.) Bola Ahmed Tinubu to take cognisance of the situation and prioritise increased revenue generation in Nigeria

Alexander Davis | ConsumerConnect

The Debt Management Office (DMO), in Nigeria, has stated that decades of operating budget deficits cum decreasing revenues by successive administrations are responsible for the high debt profile of the West African country.

Patience Oniha, Director-General of DMO, disclosed this Sunday, May 14, 2023, in Abuja, FCT.

Oniha noted that a review of the country’s fiscal data indicated that not only has the government operated budget deficits which have been growing, but most of the deficits have been funded through local and external borrowing.

The Director-General stated: “The records show that deficits in the annual budgets, including supplementary budgets rose to N10.78 trillion in 2023 from N1.62 trillion in 2015.

“Between 82 percent and 99 percent of these were funded by new borrowing which ranged from N1.46 trillion in 2015 to N8.80 trillion in 2023.

“These facts confirm that these budget deficits, funded by new borrowings, have been responsible for the rapid growth in the debt stock and the resultant increases in debt service.”

Oniha observed that this trend could have been avoided or at least moderated, if revenues had been higher or expenditures lower in the economy, agency report said.

She, therefore, tasked the incoming administration of Asiwaju (Sen.) Bola Ahmed Tinubu to take cognisance of the situation and prioritise increased revenue generation in Nigeria.

She further explained: “The budget deficits would have been much smaller, or Nigeria would have operated on a balanced budget.

“It is, therefore, imperative that the incoming government takes into account the perennial budget deficits in the preparation of the Medium-Term Expenditure Framework (2024 – 2026) and the 2024 budget.

“The government should also accelerate the growth in revenues to ensure debt sustainability.”

National debt profile

The country’s debt profile stood at N46.25 trillion December 2022, recording an increase of about seven trillion Naira from the 2021 debt figures, according to report.

Total Public debt stock, however, consists of the domestic and external debt stocks of the Federal Government, the 36 state governments and the Federal Capital Territory.

In terms of composition, total domestic debt stock is N27.55 trillion ($61.42 billion) while total external debt stock is N18.7 trillion (41.6 billion dollars)

But the public debt figures exclude the N22.7 trillion Federal Government’s indebtedness to the Central Bank of Nigeria (CBN), through Ways and Means advances.

It was learnt that the Ways and Means advances, which the Senate had scrutinised, and is currently awaiting concurrent securitisation by the House of Representatives before it is included in the country’s public debt stock.

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