As FG plans borrowing N720bn, Nigeria’s debt to exceed N50tn this year

The Debt Management Office has released the schedule of local borrowings this year and says Nigeria’s public debt will soon exceed N50 trillion, representing a 29.8 per cent increase over the N39.56 trillion recorded at the end of 2021.

Specifically, the DMO said about N720 billion would be borrowed by the Federal Government in the second quarter.

This is contained its FGN Bonds Issuance Calendar for the Second Quarter, 2022.

According to the DMO, the national public debt rose by 20 per cent, year-on-year, YoY, to N39.56 trillion in 2021 from N32.92 trillion in 2020.

The 20 per cent rise in the total public debt was driven by a 25 per cent increase in external debt and 17.3 per cent increase in domestic debt.

While total external debt rose to N15.86 trillion in 2021 from 12.71 trillion in 2020, domestic debt rose to N23.7 trillion in 2021 from N20.21 trillion in 2020.

The debt profile of states and the Federal Capital Territory rose by 8.0 per cent to N6.43 trillion in 2021 from N5.95 trillion in 2021.

Latest data on the fiscal activities of the FG in 2022 shows that the nation’s public debt might increase by N11.8 trillion to bring the year end figure to a little above N51 trillion.

According a report by Vanguard, the FG traditionally exceeds the annual budget deficit. And it recalls that in 2021, the FG exceeded the budget deficit by about 48 per cent to about N7.69 trillion from N5.2 trillion in the approved budget for the year.

It noted if this trend should persist in 2022, the FG could end up with a deficit of N9.24 trillion as against the N6.25 trillion budgeted deficit for the year.

Already, President Muhammadu Buhari has extended fuel subsidy till June 2023, resulting in a supplementary budget request of N2.56 trillion to fund the subsidy from July to December 2022.

With further rises in crude oil prices, subsidy obligation is projected to rise beyond the supplementary budget provisions, a development analysts at Afrinvest Securities Limited, a Lagos-based investment house, said would push the public debt level to dangerous territories and further worsen the nation’s debt sustainability indices.

They therefore called for a N2 trillion cut in the FG’s expenditure in 2022 to halt further deterioration in the nation’s debt sustainability indices.