FG Plans To Borrow Fresh N12tn, As Debt Hits N50tn By 2023

Abuja – The President Muhammadu Buhari’s administration plans on borrowing 12 trillion which focuses on domestic bonds, concessional external loans, that will push the county’s debt to 50 trillion.

The Federal Government hopes to push its public debt stock to N50.22tn by 2023, with domestic debt at N28.75tn and external debt at N21.47tn, as reported by Punch.

The report was extracted from projections in the National Development Plan 2021-2025.

Buhari
President Buhari | Vanguard

The Debt Management Office had disclosed that Nigeria’s public debt was N38tn as of the end of the third quarter of 2021, with the total debt stock rising by N2.540tn in three months from July to September 2021.

This shows that the regime of President Buhari, plans to accumulate about N12tn debt in two years from 2021 to 2023.

A tabular illustration in the document showed that the government targets N39.59tn debt stock for 2021, N46.63tn for 2022, N50.22tn for 2023, N50.53tn for 2024, and N45.96tn by 2025.

The government however, stated that it needs money to finance the plan of N348.1tn, and the borrowing framework in the plan is 45 per cent each for both foreign and domestic borrowing.

The statement read “The plan will require an investment of about N348.1tn to achieve the plan objectives within the period of 2021-2025.

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“It is estimated that the government capital expenditure during the period will be N49.7tn (14 per cent) while the balance of N298.3tn (86 per cent) will be incurred by the Private Sector. Of the 14 per cent, government contribution, FGN capital expenditure will be N29.6tn (9 per cent) while the sub-national governments’ capita.

“The borrowing framework in the plan is 45 per cent each for both foreign and domestic borrowing while the other financing sources account for 10 per cent.

“Domestic bonds and concessional external loan financing, amongst others, will account for the borrowing strategies for the plan. Thus, the government will improve on current debt management strategies to ensure sustainability.”

Assets must be created to justify debt, infrastructure needs essential, says analyst
An investment analyst, Omosuyi Temitope, said that although the debt servicing to revenue ratio would exceed even by 2022, the government seemed to be borrowing for obvious reasons.

He said, “As a matter of fact, debt service to revenue would remain above 80 per cent in 2022, but there are obvious reasons the government needs to embrace more borrowing.

“First, no nation can achieve long-lasting development without some forms of borrowing to finance growth-enabling projects and programmes. Nigeria’s infrastructure needs are very essential to her sustainable and inclusive growth.

“Everyone can clearly deduce the negative impact of poor infrastructure on the nation’s growth, ranging from the high cost of doing business to the high cost of living amidst a general unimpressive living condition, just to mention a few.”

He, however, stressed the need for the debt to be sustainable through the creation of assets and value that justify the debt.

“Nonetheless, it is imperative for the government to ensure debt obligations are sustainable by creating assets and value that justify the ballooning debt stock,” he said.

Abdullahi Abubakar

Abdullahi Abubakar is a graduate of the University of Maiduguri.He is a teacher and passionate about Journalism and writing in general. He works with Today Post as a senior Editor and is currently living in Gombe.

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