New Nigeria govt to inherit N77tn debt – DMO

The Federal Government has hinted that public debt may rise from N44.06tn to N77tn at the end of the year and this will be passed on to the new administration.

Director-General of the Debt Management Office, Ms Patience Oniha, said that if efforts to securitise the Ways & Means were successful, N22. 7 trillion would be added to the public debt in a transparent manner.

She disclosed this on Wednesday during the public presentation of the 2023 budget organised by the Minister of Finance, Budget and National Planning, Dr Zainab Ahmed.

Oniha said, “The DMO released the figure for the country’s debt stock as at September, you don’t expect it to be significantly different from December. Secondly, there are a lot of discussions on the Ways and Means. In addition to the significant costs saving in loans service we would get by securitizing it.

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• New Nigeria govt to inherit N77tn debt – DMO

“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 N77tn.”

The DG added that for the nation’s debt stock to decrease, revenue discussions must take the centrestage in order to ramp up that aspect of the budget.

In his remarks, the Director-General of the Budget Office of the Federation, Mr Ben Akabueze, said “Let’s take budget discussions to the revenue side.”

He stated, “Unless we fix the revenue side of the budget, the concerns about borrowing will not be addressed.”

He added that the challenge of reducing the recurrent budget, in order to increase the capital budget was difficult, explaining that nothing much could be done to reduce personnel cost, which was taking much of the non-debt recurrent.

Akabueze disagreed with claims that the Federal Government workforce was over-bloated.

For the year’s budget, the recurrent (non-debt) spending is estimated to amount to N8.33tn, inclusive of N200 billion social investment programme, while aggregate capital expenditure of N6.46tn is 30% of total expenditure; and 3.5% lower than the 2022 budget (inclusive of the capital component of statutory transfers, capital & project-tied loans expenditures).

At N6.31tn, debt service is put at 29% of total expenditure, which is 71% higher than the 2022 estimates as it includes an interest payment of N1.2 trillion for Ways & Means.