The Debt Management Office (DMO) has revealed that Nigeria’s total public debt rose to N32.915 trillion at the close of 2020 amidst the plans of the federal government to further borrow from the public in a bid to part finance the 2021 budget deficit. The DMO in its latest report on Tuesday revealed.
According to the report, the debt office explained that Nigeria’s total public debt initially prints at N32.2 trillion in the third quarter of 2020 while the sum of $500 million Eurobond was settled in January. The DMO further revealed that the debt figures include the debt stock of the federal, states levels of government including the Federal capital territory.
Following Nigeria’s exit from recession in 2017, the DMO revealed that the level of borrowing by the federal government has been on the decline as is shown in the Annual Appropriation Acts. The decline, it revealed, was part of the government’s measures to moderate the growth rate in the public debt stock as a way of ensuring debt sustainability. Thus, there are steady declines in the new borrowings by the federal government to part finance the deficits in the budget since 2017 when it was N2.36 trillion to N2.01 trillion in 2018; N1.61 trillion in 2019 and in the first appropriation Act of 2020, FG borrowed N1.59 trillion.
On the flip side, there was a trend reversal coming from the social and economic impact of the coronavirus pandemic in 2020 and we saw new borrowings in the sum of N4.20 trillion in the revised 2020 Appropriation Act. Though, several countries including advanced ones increased their level of borrowings as a result of the impact of the pandemic.
However, Nigeria’s total public debt to gross domestic product (debt-to-GDP) as of December 31 2020 was 21.61 per cent and falls within the new limit of 60 per cent for Nigeria. Consequently, several borrowings from external sources contributed to the escalation of the total debt stock. Meanwhile, it is noteworthy though, that other new borrowings were concessional loans from other bilateral and multilateral lenders; the International Monetary Fund (IMF) borrowings amounting to $3.34 billion; the additional issuance of Promissory Notes to settle some arrears of the Federal Government of Nigeria and new domestic borrowings by State Governments also contributed to the growth in the public debt stock. This is aside from the N2.3 trillion in new domestic borrowing.