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General News of Tuesday, 28 December 2021

Source: www.mynigeria.com

FG plans N12tn fresh borrowing, public debt to hit N50tn

President Muhammadu Buhari President Muhammadu Buhari

The Federal Government hopes to push its public debt stock to N50.22tn by 2023, with domestic debt at N28.75tn and external debt at N21.47tn.

This is according to the projections in the National Development Plan 2021-2025.

The Debt Management Office had disclosed that Nigeria’s public debt was N38tn as of the end of the third quarter of 2021, with the total debt stock rising by N2.540tn in three months from July to September 2021.

This shows that the regime of the President, Major General Muhammadu Buhari (retd.), plans to accumulate about N12tn debt in two years from 2021 to 2023.

However, based on the plan, the government targets a reduction in total public debt by 2025.

A tabular illustration in the document showed that the government targets N39.59tn debt stock for 2021, N46.63tn for 2022, N50.22tn for 2023, N50.53tn for 2024, and N45.96tn by 2025.

The government also discloses that it needs money to finance the plan of N348.1tn, and the borrowing framework in the plan is 45 per cent each for both foreign and domestic borrowing.

Assets must be created to justify debt, infrastructure needs essential, says analyst

An investment analyst, Omosuyi Temitope, said that although the debt servicing to revenue ratio would exceed even by 2022, the government seemed to be borrowing for obvious reasons.

He, however, stressed the need for the debt to be sustainable through the creation of assets and value that justify the debt.

Current debt rate is worrisome, borrowing pace not sustainable – Tella
On his part, a professor of Economics at the Olabisi Onabanjo University, Ago-Iwoye, Ogun State, Prof Sheriffdeen Tella, said debt level was worrisome and the government should not be considering more borrowing, urging the government to consider other ways of generating revenue.

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