DMO Explains Nigeria’s N77trn Debt Profile

• Says figure represents tally for FG, 36 States, FCT

BY EDMOND ODOK – Apprehensive over the outrage trailing the country’s debt profile projected to hit the N77 trillion mark by May 2023, the Debt Management Office (DMO) has explained that the scary figure also includes debts accumulated by the 36 State Governments and the Federal Capital Territory (FCT).

In an explanatory statement on Tuesday, the DMO management stated that the N77 trillion total public debt stock, representing the external and domestic debt of the Federal Government of Nigeria (FGN), should not be misconstrued as that of the President Muhammadu Buhari-led Federal Government alone

Offering an insight into the debt projection during the Public Presentation of the 2023 Appropriation Act by the Minister of Finance, Budget and National Planning Hajia (Dr) Zainab Shamsuna Ahmed, the statement said the Director-General of the Debt Management Office, DMO (DG-DMO), Ms Patience Oniha had, in a quick response to one of the questions, “explained that using the actual Public Debt Stock of N44 trillion as of September 30, 2022, as a basis and taking into account a number of on-going activities, the Total Public Debt Stock, that is the External and Domestic Debt of the Federal Government, thirty-six (36) State Governments and the Federal Capital Territory would be about N77 trillion.”

The statement further quoted the DG DMO as noting that the “debt that will be added to the Public Debt Data in 2023 includes the N1 trillion Ways and Means Advances to finance the Supplementary Budget which has already been approved by the National Assembly (NASS) and N22.72 Trillion Ways and Advances currently under the consideration by NASS.

“The projected Debt Stock for May 2023 also includes N5.567 Trillion representing about 50 percent of the New Borrowing of N11.134 Trillion in the 2023 Appropriation Act as well as New Promissory Notes estimated at N1.5 Trillion to be issued to settle arrears of the FGN and judgment debts. Also included are estimates for new borrowing by the State Governments and FCT.

“From these figures, it is clear that the Ways and Means Advances of N22.72 trillion which represents funds already spent is the largest source of the increment”.

The statement also read in part; “She added that the securitisation of the Ways and Means Advances will enable the DMO to include the debt in the Public Debt Stock thereby improving Debt transparency.”

The DMO Director General has been in the news recently following her remarks that the next administration will inherit a public debt of N77 trillion if the N23 trillion loans from the Central Bank of Nigeria (CBN) to the Federal Government are securitised.

She was responding to a question asked by one of the participants at the Public Presentation of the 2023 Appropriation Act by the Finance Minister on the projected level of debt stock by 29th May 2023 when the current administration’s tenure comes to an end.

The DMO boss stated that Nigeria’s total debt stock rose to N44.06 trillion as of the end of September 2022, largely reflecting the weakness of the local unit, Naira, adding, however, that should the CBN loans be added to the debt profile, the nation’s debt portfolio would increase significantly.

According to her; “Considering reports that the next administration may inherit a total public debt stock of about N77 trillion, the estimated figure can be expected only if the Ways and Means Advances from the Central Bank of Nigeria are securitized”.