Incoming administration will inherit Buhari’s N77trn accumulated debt – DMO

January 5, 2023
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The Debt Management Office (DMO) has said that President Muhammadu Buhari will hand over a whopping debt burden of N77 trillion to the incoming administration when he leaves office on May 29.

The director-general of the Debt Management Office (DMO), Patience Oniha, made this known on Wednesday, January 4, during the public presentation of the 2023 national budget by the minister of finance, budget and national planning, Zainab Ahmed.

The federal government’s huge appetite for borrowing under the administration of President Muhammadu Buhari had worsened the debt position as the country’s debt stock rose to N44.6 trillion as of September 30, 2022.

President Buhari, on Tuesday, January 3, signed the N21.83 trillion 2023 national budget, with a deficit of N11.34 trillion.

The deficit represents 5.03 percent of the country’s gross domestic product (GDP).

Zainab Ahmed, minister of finance, budget and national planning, on Wednesday, said that the federal government would finance the deficit by borrowing.

According to Ahmed, to fund the deficit, N7.04 trillion would be borrowed from domestic sources, N1.76 trillion from foreign sources, N1.77 billion from multilateral and bilateral loans, while privatisation proceeds would provide N206.18 billion.

In addition, the federal government borrowed N6.3 trillion from the Central Bank of Nigeria (CBN) in the first 10 months of 2022 through ways and means, The Whistler reports.

Ways and means is a loan facility through which the CBN finances the government’s budget shortfalls.

Oniha, while speaking at the budget presentation, explained that the move by the federal government to securitize the loans (ways and means) from the apex bank would increase the debt to about N77 trillion.

She said that, “There are a lot of discussions on the ways and means.

“In addition to the significant cost saving in loan service that we would get by securitizing it, there is an element of transparency in the sense that it has the tendency to reflect in the public debt stock.

“Once it is passed by the national assembly, it means that we will be seeing that figure included in the public debt.

“Afterwards, the country’s public debt will significantly increase to N77 trillion,” she added.

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