The Debt Management Office (DMO) said Nigeria’s total public debt stock, which was N41.60 trillion ($100.07 billion) in March, rose to N42.84 trillion (103.31 billion dollars) by June.
According to a statement from DMO’s website on Tuesday, the total debt represents the Federal Government of Nigeria’s domestic and external debt stocks (FGN), the 36 State Governments and the Federal Capital Territory (FCT).
It said that while the foreign component of the debt remained at the same level of N16.61 trillion (39.96 billion dollars), the local component increased to N26.23 trillion (63.24 billion dollars).
The News Agency of Nigeria (NAN) reports that the local component of the country’s borrowings was N24.98 trillion (60.1 billion dollars) as of March 30.
The DMO said that a more significant percentage of the external debts were concessional and semi-concessional loans. “Over 58 per cent of the external debt stock are concessional and semi-concessional loans.
“They were obtained from multilateral lenders such as the World Bank, International Monetary Fund, Afrexim and African Development Bank, and bilateral lenders including Germany, China, Japan, India and France. The total domestic debt stock increased from N24,98 trillion (60.1billion dollars) in March to N26.23 trillion (63.24 billion dollars) in June.
This is due to new borrowings by the FGN to part-finance the deficit in the 2022 Appropriation (Repeal and Enactment) Act and new borrowings by state governments and the FCT,” the DMO said.
It said that the total public Debt-to-GDP ratio remained within limits, at 23.06 per cent, while Debt-Service-to-Revenue was still high. “The Debt-to-GDP as of June 30 was 23.06 per cent compared to the ratio of 23.27 as of March 30. It remains within Nigeria’s self-imposed limit of 40 per cent.
While the Federal Government continues to implement revenue-generating initiatives in the non-oil sector and block leakages in the oil sector, Debt Service-to-Revenue ratio remains high,” it said.
Meanwhile, the Speaker of the House of Representatives, Femi Gbajabiamila, has said members of the parliament are concerned about the long-term impact of the burden that the endless borrowings by the Federal Government and growing debt profile will place on Nigeria.
Gbajabiamila, who said the President, Major General Muhammadu Buhari (retd.), was expected to lay the 2023 Appropriation Bill before the National Assembly early October, decried the huge deficit in the proposed budget of the Federal Government.
The Federal Government is proposing a budget with estimates totalling N19.76tn, while the deficit will hover between N11.30tn and N12.41tn, depending on the duration that the Premium Motor Spirit (petrol) subsidy regime will be extended, in the 2023 fiscal year.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, had, on August 29, 2022, in her presentation to the House Committee on Finance, at the hearing on the proposed 2023-2025 Medium Term Expenditure Framework and Fiscal Strategy Paper, decried that the government might be unable to provide for treasury-funded capital projects next year, especially due to dwindling revenue and petrol subsidy.
Ahmed had pointed out that crude oil production challenges and the PMS subsidy deductions by the Nigerian National Petroleum Company Limited (formerly Nigerian National Petroleum Corporation) constitute a major threat to the country’s revenue growth targets.
Gbajabiamila, in his remarks at the opening of plenary on Tuesday after the National Assembly returned from its two-month annual break, expressed concerns over the revelations from the proposal.
He said, “We hope to receive the 2023 Appropriations Bill from the President of the Federal Republic of Nigeria, His Excellency Muhammadu Buhari, GCFR, in the first week of October. In advance of this, the Senate and House Committees on Finance have begun interactive sessions with the Ministries, Departments and Agencies of the government on the Medium Term Expenditure Framework and Fiscal Strategy Paper.
“Some concerns have emerged from these interactions, most prominently of which are the issues of the scope of deficit financing to be proposed in the new budget and the decline in crude oil production due to theft and sabotage.
“While the House appreciates that our current fiscal conditions necessitate borrowing to finance budgetary expenditures, we are, nonetheless, concerned about the long-term impact of this burden on the country and our ability to pay what we owe in a responsible and sustainable way. These questions will be central to our consideration of the 2023 Appropriations Bill when presented.
“We will also be mindful of the provisions of our laws, especially the Fiscal Responsibility Act, as it relates to the scope of deficit financing of the budget. Ministries, departments and agencies of the government should take note that appropriations for new projects will be influenced by the extent to which existing projects have been funded and their performance in executing these projects as intended.”
