The Federal Government is planning to borrow fresh N4.6tn within
the next three years, covering 2020 to 2022, to finance its
programmes, figures obtained from the Ministry of Budget and
National Planning have revealed.
If the N4.6tn new borrowings scale through legislative scrutiny
and get executed, then Nigeria’s indebtedness to local and foreign
creditors would hit about N29.55tn by 2022, going by the country’s
current debt profile of N24.95tn.
The fresh borrowings were contained in the Medium Term
Expenditure Framework recently submitted to the National Assembly
by President Muhammadu Buhari.
The MTEF, which is currently being worked on by the committees
on finance and appropriation, contains the fiscal strategy of the
Federal Government for the next three years.
An analysis of the document shows that the Federal Government is
planning to borrow N1.7tn in the 2020 fiscal period.
A breakdown of the N1.7tn shows that the sum of N850bn is
expected to be sourced locally while the balance of N850bn is
expected to be raised from foreign creditors.
In the 2021 fiscal period, the government plans to borrow N1.6tn
which would be sourced in equal proportion of N800bn each from
domestic and foreign sources.
For 2022, the government projects to raise N1.3tn through debt
instruments to finance its operations. This is made up of foreign
borrowing of N650bn and domestic borrowing of N650bn.
Experts said there was the need to be concerned about the
nation’s debt as a huge chunk of government revenue was being spent
on debt servicing.
A professor of economics at the Olabisi Onabanjo University
Ago-Iwoye, Ogun, Sheriffdeen Tella, told our correspondent that the
country currently had a debt problem.
Tella said that with the Federal Government spending about 20
per cent of its budget size servicing the country’s debt, it was
practically impossible for Nigeria not to have a debt problem.
He called on the government to discontinue borrowing in order to
avoid the current situation where a huge chunk of the country’s
annual budget was spent on debt servicing.
Tella said, “We have a debt problem because when you have
problem with debt servicing, then you have a serious debt
problem.
“Currently, what we are still doing is debt servicing using a
huge proportion of the annual budget to pay debt. That is serious
because the money that you would have used for other things is now
being used to pay debt.
“We have a serious problem with debt. We should not even
accumulate further debts beyond what we currently owe.”
Also speaking, a former Director-General, Abuja Chamber of
Commerce and Industry, Mr Chijioke Ekechukwu, said the rising debt
portends danger for the economy.
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