DMO Director-General Patience Oniha revealed that Nigeria has been running a budget deficit for decades and has contracted several loans from multilaterals and bilateral. During an appearance on Channels Television’s Sunrise Daily, the DG stated that the Federal Government has been issuing promissory notes to settle obligations for which it doesn’t have the revenue. As a result, Nigeria’s debt stock has reached N46.25trn.
Oniha emphasized that borrowing is a necessary means of funding government activities, but it should be accompanied by generated revenues. She noted that borrowing can stimulate growth and generate revenue, which can offset the debt.
Oniha explained that the debt stock is growing because Nigeria has been running a budget deficit for many years. Deficits have been funded largely by borrowing. This year’s budget size is N21trn, with N10trn being borrowed. Some of the loans were sourced from multi-laterals such as the World Bank, African Development Bank, and bilaterals such as Germany, India, and China.
“The debt stock is growing because of the annual budget deficits, which are largely funded by borrowing,” Oniha said. “The third part – government issuing promissory notes to settle obligations for which it doesn’t have the revenue. So, that is why the debt stock has been growing.”
The government must address the triggers that are causing the debt stock to rise. She also advised that we should ensure that loans are put to good use in stimulating growth and generating revenue.
