Nigeria’s debt to hit N77trn in 2023 as Buhari’s government embarks on new borrowings

The debt stock of Nigeria has been predicted to rise to over N77 trillion by May 29, 2023, this year from the current amount of N44.06 trillion as at third quarter of last year.

While the “Ways and Means” facility of the Central Bank of Nigeria (CBN) is already standing at about N22.3 trillion with an interest rate of 18.5 per cent, government is expected to borrow additional N8 trillion before it exits office on May 29, this year.

The Director-General of the Debt Management Office (DMO), Patience Oniha disclosed this on Wednesday, January 4, 2022.

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According to Patience Oniha, Director-General of the Debt Management Office, the country’s debt already crossed the N44 trillion mark in September 2022, and immediately after the National Assembly approves the securitization of the CBN’s Ways and Means, the amount would be added to the national debt.

She said the move will bring the total debt profile to N77 trillion if the new loans are added.

The debt profile is also growing from the issuance of promissory notes, inherited in part from previous governments, with more to be issued between now and June 2023.

President Muhammadu last week wrote to the National Assembly asking for approval for the restructuring of N22.7 trillion in Ways and Means advances given to the Nigerian government by the CBN.

The lawmakers refused to approve the president’s request, insisting on conducting due diligence.

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Minister of Finance, Budget, and National Planning, Zainab Ahmed said approving the CBN securitization would be beneficial, saying the interest on the debt is worrisome.

Ahmed stated that if the request is not approved, the interest rate will continue to accumulate from about N1.8 trillion to N2.2 trillion in addition to the principal.

The Punch reports that The Ways and Means Advance by CBN is a loan facility through which the Central Bank of Nigeria finances the shortfalls in the nation’s budget.

Ahmed said the Nigerian government has spent about N5.24 trillion on debt servicing alone between January and November 2022, out of its N12.87 trillion total spending for the same period. She said domestic debt consumed N2.5 trillion, foreign debt N1.08 trillion, and interest on CBN loans stood at N1.64 trillion.

The World Bank had projected that Nigeria’s borrowing from the CBN would consume 62 percent of government revenue by 2027, irrespective of the country’s restructuring plan.

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