The Debt Management Office has disclosed that Nigeria’s public debt burden may hit N77tn if the National Assembly approves the request by the President Muhammadu Buhari, to restructure the Ways and Means Advances.
This was revealed by the Director-General of DMO, Patience
Oniha during the public presentation of the 2023 budget organized by the
Minister of Finance, Budget and National Planning, Dr Zainab Ahmed.
The Ways and Means Advances is a loan facility through which
the Central Bank of Nigeria finances the shortfalls in the government’s budget.
This is as the Federal Government spent N5.24tn servicing debts in 2022.
Oniha, however, noted that the debt would be N70tn without
N5tn new borrowing and N2tn promissory notes.
She 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.
“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.”
She said while the debt is growing because there is new
borrowing, revenue is receiving significant importance.
“Like DMO always says, you can’t talk about debt without
talking about revenue. We need the two to work together,” she added.
The FG’s huge appetite for borrowing under the current
regime had worsened the debt position as the country’s debt stock rose to
N44.06tn as of September last year.
The DMO and the government had come under attacks from
experts and key stakeholders in the economy over the country’s rising debt
levels.
Meanwhile, President Muhammadu Buhari recently transmitted
to the National Assembly, a request for approval of Ways and Means Advances
restructuring to the tune of N23.7tn.
At the plenary on December 21, President of the Senate,
Ahmad Lawan; and Speaker of the House of Representatives, Femi Gbajabiamila,
read out Buhari’s request to members of the respective chambers.
In the request titled ‘Restructuring of Ways and Means
Advances,’ the President wrote, “The Ways and Means Advances by the Central
Bank of Nigeria to the Federal Government has been a funding option to the
Federal Government to cater for short-term or emergency finance to fund delayed
government expected cash receipt of fiscal deficit.
“The Ways and Means balances as of 19th December 2022, is
N23,719,703,774,306.90. I have approved the securitisation of the Ways and
Means balances along the following terms: amount, N23.7tn; tenure, 40 years;
moratorium on principal repayment, 3 years; pricing interest rate, 9 per cent.
Your concurrence and approval is sought to allow for the implementation of the
same.”
However, the Senate denied the request by the President to
restructure the N23.7tn Ways and Means advances, noting among various
reasons that FG spent N5.24tn servicing
debts in 2022.