Outrage, apprehension as Nigeria’s debt profile races to N80trn in twilight of Buhari govt
With Nigeria’s total debt stock racing to over N80 trillion, there is heightened concern in the country.
Stakeholders are of the view that Nigeria’s economy is in an emergency situation and on the verge of collapse if nothing is done.
Although the Debt Management Office has consistently dismissed fears surrounding Nigeria’s increasing debt profile, economic analysts have never kept mum, signalling the alarm bill.
DMO, in its Fourth Quarter report of 2022, said Nigeria’s total debt hovers around N46.25 trillion.
Specifically, the total domestic debt stock was N27.55 trillion, while external debt stock was N18.70 trillion (USD 41.69 billion) as of December 2022.
Meanwhile, with the recent borrowing spree by the federal government and the National Assembly’s approval of the Central Bank of Nigeria’s Ways and Means advance to the federal government, the Nation’s external and internal wealth could have surpassed N80 trillion.
At the inauguration of President Muhammadu Buhari’s administration in 2015, the country’s debt stock had continued to soar, rising from N12.6 trillion to over N80 trillion as the government prepares for exit on May 29.
It is evident that in the eight years of Buhari’s administration, borrowing to fund yearly budget deficits became routine. Here, the projected budget deficits from 2015 to 2023 are estimated to be over N47.73 trillion, according to an analysis from the Debt Management Office, DMO’s data.
Accordingly, Nigeria’s budget deficit rose by 370.54 per cent from N2.41tn in 2016 to N11.34 trillion in 2023.
At the moment, whether the country is debt trapped or hooked becomes a judgement of semantics.
Recall that the World Bank said Nigeria spent 96.3 per cent of its revenue on debt servicing in 2022.
However, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed objected to the World Bank figure. She clarified that 80.6 per cent of Nigeria’s revenue was spent on debt servicing in 2022. Whichever figure one would want to run with, a significant chunk of the Nation’s revenue is being eaten up by debt.
On Monday, the Director-General of DMO, Patience Oniha, told DAILY POST that the agency has yet to release the March 31, 2023, debt figures.
“The March 31 figures have not been published,” she disclosed.
But, speaking with DAILY POST on Monday, the Chief Executive Officer of SD & D Capital Management, Mr Idakolo Gbolade decried that the outgoing government had financed its budgets through loans since 2015.
He urged the incoming government to look for ways to restructure and negotiate the Nation’s indebtedness to avoid collapse.
“The outgoing government has been financing the budget from loans since 2015 which gave rise to the unbearable loan position the country is now shouldering.
“We had continuously increased the debt stock even in the face of dwindling revenue. Major infrastructural projects executed or being executed do not have the capacity to repay the loans due to insecurity and wrong prioritisation of projects.
“Projects like the rail network are facing security challenges which have made them unable to generate adequate revenue. Other projects like roads are not commercially viable because they are not tolled.
“Investments in aviation have not also yielded enough revenue to service the loans used for its execution.
“In the face of insufficient revenue to service existing debt, the debt stock has increased to 77 trillion due to the securitization of the ways and means of the facility to the tune of N22.7 trillion.
“The debt situation in Nigeria is precarious and needs urgent intervention by the incoming government.
“The present indebtedness must be negotiated and repayment restructuring should be done to give breathing space for infrastructural development.”
(Daily Post)
