News

Stop Borrowing, Experts Warn FG As Debt Profile Hits N41.6tr

Economists have come hard on the Federal Government, as it proposes another round of borrowing for the 2023 budget year. Unanimously, they warned the government to stop borrowing, just as the Director-General of the Debt Management Office (DMO), Patience Oniha, yesterday, confirmed that Nigeria’s debt profile as of March 2022 stood at ?41.60 trillion.

Stop borrowing, experts warn FG as debt profile hits N41.6tr — Nigeria —  The Guardian Nigeria News – Nigeria and World News

Oniha, during her appearance at the ongoing engagement on the 2023-2025 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) held by the House of Representatives Committee on Finance, yesterday, attributed Nigeria’s high debt profile to a lack of revenues and approval of the yearly budget with a deficit by the National Assembly, which increased the nation’s debt stock.

She regretted that the country has been running a deficit budget for many years with an increased level of borrowing, especially since the outbreak of the COVID-19 pandemic, stressing that the only way out of the problem is improved revenue generation.

She said: “As of December 2020, the debt stock of the federal, state governments and the Federal Capital Territory was ?32.92 trillion. By December 2021, it jumped to ?39.556 trillion. We publish quarterly, and as of March of this year, it was N41.6 trillion. On average, Federal Government is owing about 85 percent of the total sum.

“We have been running a deficit budget for many years and each time you approve a budget with a deficit, by the time we raise that money because when you approve it, it is giving us a mandate, authority to borrow, it will reflect in the debt stock, so debt stock will increase. Also, note that states are also borrowing. So, we add their own.

“Until the issues of personnel, overhead, and capital expenditure are properly addressed in the budget, borrowing would not stop.”

Recall that the Minister of Finance, Budget, and National Planning, Zainab Ahmed, had laid before the lawmakers on Tuesday, the 2023-2025 MTEF/FSP, where she disclosed that the Federal Government will borrow over ?11 trillion and sell national assets to finance the 2023 budget deficit.

Source: Guardian

Leave a Comment

Share: