• Reps C’ttee demands details earmarked for borrowing in 2023 budget
By Christiana Ekpa
The Director-General of the Debit Management Office (DMO), Patience Oniha, on Monday revealed that the domestic debt profile of Nigeria stands at N3.564 trillion.
Oniha disclosed this when she appeared before the House of Representatives committee on Aids, Loans and Debt Management to defend the agency’s 2023 budget.
She explained that the domestic debt profile of the country is rising from ₦2.2 trillion in 2022 to ₦3.3 trillion in 2023 due to high interest rate from borrowed funds from domestic and international sources of funds.
The DG noted that borrowing is a collective responsibility, emphasising that the parliament look at borrowing of funds by the government from a macro-economic perspective.
She said “In the 2022 Appropriation act, you will see that there was new borrowing of N6.1 trillion. Domestic is N3.564 trillion and external is N2.569 trillion. for domestic borrowing, as at October 2022, we had raised N2.2 trillion, meaning that we have raised about 91 percet of the total domestic borrowing to support the government. That is what has helped in brching the gap in revenue which under performed sinificantly between January and August.
“On the outstandong ones, we are working on the Sukuk an the offer will open in te next two weeks and we will issue FGN bonds as well. we are hoping to raise the balance before the end of the year. Where there is issue is the ne external borrowing. What was provided for in the 2022 budget is N2.57 trillion.
“The reality is that is it was before, by now, we would have issued Euro bonds to raise the money. But from the fourth quarter of last year, the International Capital Market has not been opened to countries like Nigeria. in 2021, there was N6 billion to be raised, but we raised N4 billion out of that. This year, we raised N1.25 billion. That was the only day the International capital market was opened.
“Since january this year, countries with our rating, the international market are not looking for us because the invasion of Ukraine by Russia turned around things in the world significantly. So, inflation rates are high, interest rates are high and investors are saying there is a lot of uncertainty, there is threat of recession. So, what they have decded to do is to put their money in the G7 nations.
“Interest rates there hve gone up significantly and monetary policy has raised interest rate across the world and foreign investors are hapy to invest in those nations. Right now, they dont know what will happen with us and we have not issued any Euro bond this year because the market has not opened. So, right now we are looking at export credit, development finance institutions toraise money which are project tied for government”
“For domestic debt, the budget was N2.5 trillion, but we have spent N1.86. External debt is N866 billion compared to N1.123 trillion. Thee figures are for three quarters. On the Sinking Fund, we have N286 billion, while ways and means advances which was not provided for in the budget, the Central Bank has charged over a trillion naira as interest. That is why in the MTEF/FSP, you discover that revenue to debt service was very high. For January to April, we actually exceed 100 percet of revenue. So, Apart frm revenue being very low, there is this issue of ways and means advances. So, by the end of December, Debt services will be higher than what was budgeted, largely because of ways and means advances” she said
Chairman of the committee, Ahmed Safana, expressed concern at the astronomical increase in the debt profile of the country.
Hon.Safana noted that there is ₦1 trillion increase in the debt profile of the nation in the last one year calling on the DMO as a relevant agency to halt the frequency of borrowings.
A member of the committee from Anambra State, Emeka Azubogu argued that borrowings by government at any level must be tied to specific projects and demanded details of the ₦3.55 trillion earmarked for borrowing in the 2023 budget.
The committee members also directed the DMO to submits to the panel all the details of assets sold, payment made and outstanding debts owed to the agency under privatisation.
