Borrowings to fund budget deficits by Federal Government, the 36 states and the Federal Capital Territory (FCT) escalated Nigeria’s total public debt stock to N46.25 trillion as at December 31, 2022. The Debt Management Office DMO (DMO) confirmed the latest figure in its verified tweeter handle yesterday.
Comparative figure for December 31, 2021, is N39.56 trillion or $95.77 billion, DMO explained. This was as the debt agency rationalised the figures, saying it’s within sustainable threshold. In terms of composition, domestic debt stock component was N27.55 trillion ($61.42 billion) while total external stock was N18.70 trillion ($41.69 billion). Recall that the nation’ total debt stock stood at N44.6 trillion in the third quarter of last year Q3’22). Amongst reasons cited by the debt agency as responsible for slight rise included “new bor-rowings by the FGN and sub-national governments, primarily to fund budget deficits and execute projects.”
In addition, DMO rationalised issuance of Promissory Notes by the FGN to settle some liabilities as contributing responsible for growth in the debt stock. As a cushioning measures, DMO banked on current efforts by the government to expand revenue sources and buoy income streams as a strategies to mitigate debt impacts. It said: “Ongoing efforts by the government to increase revenues from oil and non-oil sources through initiatives such as the finance Acts and the strategic revenue mobilisation initiative are expected to support debt sustainability.”
It noted that “the current debt stock stock to Gross Domestic Product (GDP) ratio for December 31, 2022, was 22.47 per cent and indicates a slight increase from the figure for December 31, 2021. “The ratio of 23.20 per cent is within the 40 per cent limit self-imposed by Nigeria, the 55 per cent limit recommended by the World Bank/ International Monetary Fund, and, the 70 per cent limit recommended by the Economic Community of West African States.” Nigeria’s burgeoning debt stock attracted public outcry in early January this year when it was projected it could climbed up to N77 trillion by May if the borrowing from the Central Bank of Nigeria (CBN) via Ways and Means, in addition to other borrowings are added to it. CBN’s Ways and Means borrowing to the government, which stands at N22.72 trillion, forms part of the debt stock expected to shoot up total debt stock to projected N77 trillion by May this year. Ways and Means debt represents already spent money, which the Federal Government had approached the National Assembly’s endorsement for securitisation.