Nigeria’s debt to hit N30tn as FG plans to borrow N4.6tn

The Federal Government is planning to borrow fresh N4.6tn within the next three years, covering 2020 to 2022, to finance its programmes, figures obtained from the Ministry of Budget and National Planning have revealed.

If the N4.6tn new borrowings scale through legislative scrutiny and get executed, then Nigeria’s indebtedness to local and foreign creditors would hit about N29.55tn by 2022, going by the country’s current debt profile of N24.95tn.

The fresh borrowings were contained in the Medium Term Expenditure Framework recently submitted to the National Assembly by President Muhammadu Buhari.

The MTEF, which is currently being worked on by the committees on finance and appropriation, contains the fiscal strategy of the Federal Government for the next three years.

An analysis of the document shows that the Federal Government is planning to borrow N1.7tn in the 2020 fiscal period.

A breakdown of the N1.7tn shows that the sum of N850bn is expected to be sourced locally while the balance of N850bn is expected to be raised from foreign creditors.

In the 2021 fiscal period, the government plans to borrow N1.6tn which would be sourced in equal proportion of N800bn each from domestic and foreign sources.

For 2022, the government projects to raise N1.3tn through debt instruments to finance its operations. This is made up of foreign borrowing of N650bn and domestic borrowing of N650bn.
Experts said there was the need to be concerned about the nation’s debt as a huge chunk of government revenue was being spent on debt servicing.

A professor of economics at the Olabisi Onabanjo University Ago-Iwoye, Ogun, Sheriffdeen Tella, told our correspondent that the country currently had a debt problem.

Tella said that with the Federal Government spending about 20 per cent of its budget size servicing the country’s debt, it was practically impossible for Nigeria not to have a debt problem.

(Credit: Punch)