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Senate Alarmed Over Nigeria’s Rising Public Debt Stock, Projected To Hit N38.68tr December, 2021
Andy Asemota
TN Reports
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The Senate has deplored the total public debt stock comprising the external and domestic debts of the Federal and state governments including the Federal Capital Territory (FCT) which stood at N31.01 trillion (USD85.90 billion) as at June 30, 2020, and is projected to rise to N32.51 trillion by December 31, 2020 and N36.68 trillion by December 31, 2021.
The Senate committee on Local and Foreign Debts decried the jump in the debt stock as “very alarming” on Tuesday when the Minister of Finance, Budget and National Planning, Zainab Shamsuna Ahmed, defended the provisions for payment of the local contractors’ debt under capital supplement in the 2021 budget proposal before the committee.
The committee also queried the huge difference between the amount approved and the funds released for the debt servicing this year.
The chairman of the senate committee, Clifford Ordia, however assured the minister of the senate’s resolve to work with the Federal Government to reduce the debt, particularly the debts due to local contractors.
In her presentation, the finance minister said the 2021 appropriation bill has a provision of N3.124.18 trillion for debt service, adding that domestic debts service has a provision of N2.18349 trillion, representing 69.89%, while external debt service has a provision of N940.89 billion or 30.11%.
A breakdown of the 2021 appropriation bill, she said, shows provision for new borrowing of N4,281 billion with domestic borrowing component standing at N2,140.58 billion, while the deficit is to be funded by borrowing.
The minister further said the Federal Government expects 1.5 billion dollars from the World Bank and about 500 million dollars from Islamic Development Bank before the end of 2020, saying about 3.4 billion dollars from the IMF has been disbursed as part of the nation’s external borrowing for the year.
Added that the revised 2020 appropriation act had N4,198.57 billion as new borrowing to finance the budget deficit.
On the status of the new borrowing in the 2020 appropriation act, she stated that new domestic borrowing, representing N2,213.89 billion in the budget stood at N2,188.89 billion or 98.88% as at 23rd October, 2020, while the new external borrowing estimated at N1,984/66 billion in the budget stood at N1,224.00 or 61.62% as at 23rd October, 2020.
She stressed that the new domestic borrowing included a SUKUK N162.56 billion, which was issued in June, 2020, while the balance of N25.00 billion would be raised between November and December, 2020.
The minister also assured that the rise in the nation’s debt profile followed about 60% crash in oil revenue rather than an increase in expenditure.
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