If everything goes as planned, Nigeria’s total debt will grow to N48 trillion by 2024.
This is going by the government’s planned borrowings from 2022 to 2024.
According to data from the Ministry of Finance, Budget and National Planning, the Federal Government is projected to borrow N14,999,848,197,680 from 2022 to 2024.
This will bring Nigeria’s total debt to over 48 trillion when added to the current N33.1 trillion.
The implication of this sustained borrowing is there will immense pressure on the government to service these loans thus leaving little for the provision of basic infrastructure and social intervention programmes.
Between January and May 2021, the Federal Government has spent N1.80 trillion on debt servicing representing (37 percent of FGN expenditures). Within the same period, the government realized N3.39 trillion from both oil and non-oil revenue sources.
N7,499,924,098,839 will be sourced from domestic borrowings as follows: N2,446,790,640,407 in 2022; N2,375,041,155,994 in 2023; and N2,678,092,302,438 in 2024.
An equal amount of N7,499,924,098,839 will be borrowed from foreign sources in similar amounts over the same three years period.
Government is planning to raise additional funding from Privatization Proceeds in the order of N90,731,800,000 in 2022; N13,770,000,000 in 2023 and N6,237,000,000. Government is also projecting to generate revenue from Multi-lateral/Bi-lateral Project-tied Loans. These loans will be staggered into N638,315,160,152 in 2022; N513,827,475,803 in 2023 and N513,827,475,803 in 2024.
Within the three years, debt servicing will gulp 43 percent of the revenue realised in 2022, 48 percent in 2023 and 57 percent in 2024.
The government is bothered that “weaker-than-expected economic performance threatens our ambitious revenue growth targets”.
However, “non-oil revenue performance has been impressive and heading in the right direction”.
Government is also worried about the “high cost, including PMS under-recovery and cost of securing oil pipelines which are forever weighing down on oil revenues, these issues must be addressed wholesomely to free up much needed fiscal space”.
On the expenditure side in 2021, N4.86 trillion (representing 92.7 percent of the prorated budget) has been spent. According to the Ministry document, “this excludes Government Owned Enterprises (GOEs) and project-tied debt expenditures.
It was from this expenditure that N1.80 trillion was used for debt servicing and N1.50 trillion for Personnel cost, including Pensions.
As at May 2021, N973.13 billion had been released for capital expenditure.
