Incoming Administration Will Inherit N77trn Debt – DMO

The federal government has revealed that the incoming administration would inherit about N77 trillion debt by the time President Muhammadu Buhari’s tenure ends in May next year. Director General of the Debt Management Office (DMO), Ms. Patience Oniha, disclosed this yesterday in Abuja while fielding questions from journalists at the public presentation and breakdown of the highlights of the 2023 Appropriation Act

The National Assembly recently approved the sum of N819.5 billion as supplementary budget for 2022.

In another letter, the president had also informed the lawmakers that the government would take another N1 trillion loan from the Central Bank of Nigeria (CBN) through Ways and Means. The additional N1 trillion would take the total Ways and Means Advances from the CBN to N23 trillion, which the government seeks to convert to bonds.

But Oniha explained that the move by the federal government to securitise the loans (Ways and Means) from the central bank would drive up the debt to about N77 trillion

Although data released by the DMO had put Nigeria’s public debt at N44.06 trillion as at third quarter 2022, the federal government plans to further borrow to finance its supplementary budget as well as the 2023 budget.

Oniha explained, “There are a lot of discussions on the Ways and Means. In addition to the significant cost saving in loan service we would get by securitising it, there is an element of transparency in the sense that it is now reflected in the public debt stock.

Once it is passed by the National Assembly, it means we will be seeing that figure included in the public debt. You will see a significant increase in public debt to N77 trillion.

“The other area of the debt stock we are trying to highlight is to say the debt stock is also growing from the issuance of promissory notes, which are not true borrowing as such by the government.”