The federal government Thursday said it has projected new borrowings for 2022 at N6.295 trillion.
This is even as the nation’s debt profile stands at N39.556 trillion or $95.770 billion, the Debt management Office (DMO) has said.
Director-General of the Debt Management Office (DMO), Ms Patience Oniha made this known during a media parley on the presentation of the Public Debt Data as at December 31, 2021 in Abuja.
The DMO boss put new domestic borrowing at N2, 568, 757, 539,324; New external borrowing N2, 568, 757, 539,324 and Multi-lateral/Bi-lateral loan drawdowns at N1, 155,823, 207,148 making a total of N 6, 295, 338, 286, 148.
“Nigeria has a double challenge of a low revenue base and a huge infrastructure gap, significant improvements in infrastructure have been recorded over the years, there are limits and required approvals for new borrowings, the DMO continues to deploy the World Bank/IMF tools (DSA and MTDS) to monitor debt levels and sustainability.”
On the debt profile, the amount according to the DMO rose by N6.641 trillion when compared to the 2020 figure of N32.915 trillion or $89.392 billion.
According to the Oniha, the borrowings were raised from diverse sources, primarily through the issuances of the Eurobonds, Sovereign Sukuk and FGN Bonds.
These capital raisings, she said, were utilized to finance projects and support economic recovery.
The DMO DG explained that access to the international market and the impact of Covid-19 pandemic was responsible for the rise in Sovereign debt because “all countries needed to borrow.”
She disclosed that as at last week, N950 billion has so far been raised from domestic sources for the 2022 borrowings.
According to the DMO’s data Nigeria’s debt increased from 13 per cent in 2014 to 19 per cent in 2019.
She said: Debt is not necessarily a bad thing. It is an accumulation from the budget deficit. The challenge is revenue. If you increase revenue, your debt service will be lower.”
Data from the debt office showed that with the 2021 budget deficit at N6.449.35 trillion, Nigeria borrowed N5.488.80 trillion which is 85 per cent of the deficit. Also, with 2022 budget deficit put at N6.386.07 trillion, Nigeria plans to borrow N5.139.52 trillion, which is about 80.48 per cent of deficit.
Listing some of the causes of borrowing to include, high infrastructure deficit, recession, consecutive budget deficit, and low revenue base, Oniha, noted that to reverse the trend, there is need to shore up Nigeria’s revenue base.
She told journalists present that to reverse the trend, the Office (DMO) was implementing some initiatives which include: developing debt management tools; spreading maturities; applying a wide range of financial instruments; project tied financing alternatives; and debt repayment spread over overtime.
