Despite Nigeria’s N31 trillion debt, Zainab Ahmed, the Minister of Finance, Budget, and National Planning has disclosed the Federal Government’s (FG) plan to secure an additional N6 trillion loan by December 2021.
The minister recounted that the total public debt stock of the country, which comprises foreign and local debts stood at N31.01 trillion as of June 30, 2020, as she expressed confidence that the FG will borrow more funds to run the economy next year.
“The total public debt stock comprising the external and home debts of the federal and state governments and the Federal Capital Territory stood at N31.01 trillion ($85.90 billion) as of June 30, 2020.
“It is projected, based on existing approval, to rise to N32.51tn by December 31, 2020, and N38.68 trillion by December 31, 2021,” Ahmed stated.
Among some of the bodies that have fumed at the incumbent administration of the country’s consistency with securing loans is –Lagos Chamber of Commerce and Industry (LCCI).
Raising alarm over the increasing debt profile, Toki Mabogunje, the President of LCCI, stated that the country’s debt is fast becoming unsustainable.
Making reference to the Debt Management Office (DMO), Mabogunje explained that the increase in Nigeria’s public debt was because of the fresh domestic and external borrowing, which she noted were meant to connect the wide fiscal deficit in the revised 2020 budget given the economic impact of COVID-19 and recent exchange rate devaluation.
Nigeria’s alarming portfolio
Recall that some months ago, DMO released the country’s debt report.
In the report, Unmask NG learnt that Nigeria’s total debt stock, which comprises foreign and local arrears, as at June 2020 stood at N31.01 trillion, which represents 8.31% increase when compared to her N28.63 trillion debt profile as at March 2020 (three months prior).
Out of the N31.01 trillion debt profile, external debt stood at N11.36 trillion, representing 36.65% of the total debt stock. On the other hand, domestic debt at N19.65 trillion, representing 63.35% of the total debt.
The DMO report also disclosed that N1.21 trillion was spent to service the loans during the period under review. While domestic debt servicing gulped N921.9 billion, the government spent N288.6 billion to service its foreign debts.
Here’s what you should know
In spite of concerns from economic experts, industry players and stakeholders, and international bodies, President Muhammadu Buhari-led government has channeled its focus on borrowings and adding to Nigeria’s alarming debt stock.
From recent comments by officers in Buhari’s cabinet, it is pretty much obvious that loans seem to be the only way the incumbent administration can secure funds to keep the economy running.
But the reality is, should the government continue on this trend, the increasing debt would not stop to disrupt large investments on infrastructures, which are meant to stimulate productivity and improve the standard of living of the people.