The director general, Debt Management Office (DMO), Ms. Patience Oniha, said yesterday that the new government would inherit about N77 trillion by the time President Muhammadu Buhari leaves office on May 29.
Addressing journalists after the public presentation and breakdown of the highlights of the 2023 Appropriation Act in Oniha said the country’s debt stock would be that high if the national assembly approved the president’s request to restructure the ways and means advances.
Recall that Tuesday, Buhari signed the N21.83 trillion 2023 budget into law, with a deficit of N11.34 trillion.
The deficit represents 5.03 percent of the country’s gross domestic product (GDP).
Recall also that the national assembly had approved N819.5 billion as supplementary budget for 2022 while the president in another letter informed the lawmakers that the government would take another N1 trillion loan from the CBN through ways and means.
The N1 trillion would drive advances from the CBN to N23 trillion, which the government seeks to convert to bonds.
Ways and means is a loan facility through which the CBN finances the government’s budget shortfalls.
Although data released by the DMO had put Nigeria’s public debt at N44.06 trillion as at the third quarter 2022, the federal government plans to borrow more to finance both the supplementary and 2023 budgets.
“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,” Oniha said.
Earlier, the minister of finance, budget and national planning, Zainab Ahmed, said when the ways and means get legislative backing, it would help reduce the current interest on it to about nine per cent, while also stretching repayment period to about 40 years.
On funding sources for the N11.34 trillion 2023 budget deficit, the minister said 22 percent of projected revenues will come from oil-related sources while 78 percent will be earned from non-oil sources.
To fund the deficit, the minister said N7.04 trillion would be borrowed from domestic sources, N1.76 trillion from foreign sources, N1.77 billion from multilateral and bilateral loan draw downs, while privatisation proceeds would provide N206.18 billion.
