Nigeria’s total debt stock could increase to N77 trillion from N44 trillion in the new year.
This is if the President’s requested loan is approved.
If that’s the case the next administration would inherit this debt.
According to the Nigerian Debt Management Office, the next administration of the country could inherit a public debt of N77 trillion ($172 billion).
This is assuming the recent loan requested by the current administration is approved. This information was disclosed by The Director-General of the DMO, Patience Oniha via a statement she released on Thursday.
Last week lawmakers delayed the president’s request for the approval of the N23.7 trillion loan that had already been spent, as per PremiumTimesNG.
This caused an uproar in the legislature, as said lawmakers demanded a rundown of how the money was spent. The lawmakers also accused the president of violating the office’s standard protocols.
“Considering reports that the next administration may inherit a total public debt stock of about N77 trillion, the estimated figure can be expected only if the Ways and Means Advances from the Central Bank of Nigeria are securitized,” the director general of the DMO said.
“Nevertheless, it should be noted that the securitization will enhance debt transparency as the DMO will then be able to include the debt in the total public debt stock. If securitization is achieved, a brief breakdown of the estimated total public debt stock by May 2023 may comprise the current total public debt stock of N44.06 trillion; the Ways and Means Advances of N22.72 trillion currently under the consideration by lawmakers.” she added.
She also revealed that the projected debt stock for May 2023 remains at about N5.567 trillion.
Speaking on the subject, the Minister of Finance, Budget and National Planning, Zainab Ahmed, noted that the Ways and Means with legislative support could aid reducing the current interest on it to about 9%, simultaneously extending the repayment period to approximately 40 years, as per the news agency, This Day.
“Currently, the Ways and Means is running interest rates, which today is averaging 18.5%. So if this is not affordable, the interest rates accruing again and adding to the Ways and Means anything from N1.8 trillion to N2.2 trillion. So, that will be the consequence,” she said.
“I’m sure they will understand. So, once that approval is given, it will benefit from a lower interest cost of 9% and will benefit from a stretched initiated plan of 40 years with a three- year moratorium which will provide very significant relief to the federal government,” she added.
She also noted that there are currently no plans to restructure the country’s debt, and the Nigeria remains committed to servicing its total debt.
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