Nigeria Owes N38.005trn As DMO Canvasses Revenue Boost To Lower Borrowings
- Debt figures as of September 30, 2021
BY COBHAM NSA – Clearly grappling with troubling figures at its disposal, the Debt Management Office (DMO) has again challenged the Federal and states governments to increase their revenue drive as part of conscious efforts at reducing Nigeria’s debt profile and moderating fresh borrowings in the country.
This is as the Office said in its latest publication that Nigeria’s Total Public Debt stands at N38.005 trillion or USD92.626 billion as of September 30, 2021. The data cover the total external and domestic debts profile of the Federal Government of Nigeria (FGN), thirty-six (36) State Governments, and the Federal Capital Territory (FCT).
Director-General of DMO, Ms Patience Oniha, who spoke during a virtual interactive session tagged: “Nigeria moving beyond COVID-19; Opportunities for investors” organised by Coronation Merchant Bank (MB) on Tuesday in Lagos, said the government needs to prioritise and invest heavily in sectors capable of generating increased revenue such as agriculture, mining, and ICT to grow the economy.
And for the umpteenth time, Oniha said sectors with robust revenue potentials are better placed to respond and handle the risks associated with variations and other emergencies occasioned by unsettling economic issues.
Oniha, who noted that Nigeria’s debt profile has been on the rise due to revenue drop and the impact of coronavirus pandemic on the economy, said the borrowings were already declining until the COVID-19 crisis forced Nigeria, like many other nations, into more loans aimed at stimulating the economy and creating more jobs for the citizens.
According to her; “To increase the level of revenue, and the DMO is very much in support of that; if we grow revenues, then debt service will be lower and debt will be sustainable, but it also means that we may not need to borrow that much.
“The second point which we have put forward to the government is that it cannot finance the projects like it used to. Our position for debt sustainability is to grow revenues and begin to work with the private sector to finance capital projects, and that way, the only thing that might increase is the off-balance sheet liabilities in terms of guarantees and not on the balance sheet borrowing.”
Commenting on Nigeria’s likely return to the Eurobond market after successful issuances, the DMO boss said; “We do have 6.18 billion dollars to raise for the 2021 budget but our transaction advisers told us to do 4 billion dollars. We were looking to go back at some point but within one week of pricing, the market headed south and is still in that situation right now.”
Meanwhile, in line with its usual practice, the Office said its published figures on Nigeria’s Total Public Debt as of the end of Q3 2021 indicate an increase of N2.540 trillion compared to the corresponding figure of N35.465 trillion at the end of 2021 second quarter.
It said the development was largely accounted for by the USD4 billion Eurobonds issued by the Government in September 2021, even as the issuance of the USD4 billion Eurobonds also brought significant benefits to the economy by increasing the level of Nigeria’s external reserves.
The DMO said ultimately, the cheering news is that the Eurobonds’ issuance hugely supported the Naira Exchange Rate and provided the necessary capital for the Federal Government to reasonably finance various projects in the 2021 budget.
Available records showed that the triple tranche USD4 billion Eurobond, issued in September 2021, was for the implementation of the New External Borrowing of USD6.18 billion in the 2021 Appropriation Act.
