• Govt Spending Shrouded In Secrecy As Debt Burden Grows • Experts Alert To Distress, Impending Sovereign Default • Over N15t Fresh Loans Considered For 2022-2024 • Nigeria Poor, Must Keep Borrowing To Fund Programmes – Senate President • We Need To Align Cost Of Governance With Economic Realities – Economists
Barely 16 months to the end of President Muhammadu Buhari’s second and final term in office, the window of opportunity to deliver the promised strong economy and the secured nation is becoming narrow.
Indices such as dwindling earnings, mounting debts, unaffordable debt servicing, deepening macro instability, rising insecurity, and waning public goodwill appear to be working against the President’s desire to finish strong.
And as he inches closer to retirement from public life after about five decades of service, part of which he had spent as military head of state and minister of petroleum before being democratically elected, Nigeria’s huge debt profile could be the most resounding talking point in the assessment of post-Buhari era.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, had also disclosed at a forum by the African Development Bank (AfDB) that what had been reported as national debt did not capture some obligations of some states
To be sure, from , when the President inherited what his cabinet members have described as “a dying economy,” till date, Nigeria’s public debt stock has increased by over threefold. Precisely, the country has added N trillion to its initial debt in less than seven years.
As of the first quarter of 2015, the country’s public debt stood at N trillion, a figure that has ballooned to N38 trillion as of last September, recording a growth of 208 per cent.
Still, the official statistics under-reports the actual amount owed. Last year, the Fitch Ratings, a global research institution, raised the alarm that the government’s reliance on ways and means facility (WMF), facilities sourced from the Central Bank of Nigeria (CBN) to fund budget shortfalls, to finance its deficit was a major cause of the country’s rising inflation.
The Debt Management Office (DMO) did admit the existing WMF was a challenge and disclosed a plan to convert it to a 30-year debt instrument. As at early 2021, the amount, which is not captured by the national debt reporting, was estimated at N10 trillion. At a media function later last year, the DMD Director-General, Patience Oniha, could not give the updated figure but confirmed that, “it was estimated at N10 trillion earlier in the year.”
Since about a year ago when DMO said it would convert the opaque WMF to a long-term instrument payday loans in Minnesota, no update on the intention or the status of the debt has been given again. The absence of full disclosure of the WMF outstanding is but one of the many pieces of information about the country’s debts shrouded in secrecy.
The World Bank had warned that poor transparency was a challenge in the discussion of debt sustainability of developing countries, including Nigeria
AfDB President and former Nigeria’s Minister of Agriculture, Akinwumi Adesina, and the Director-General of the World Trade Oragnisation, Ngozi Okonjo-Iweala, had also warned at the same forum where Ahmed spoke, that Nigeria could be heading toward debt distress again.
In deviance from the warnings, the Finance Minister, President of the Senate, Ahmad Lawan, and many other public officials said Nigeria has no feasible alternative debt funding. The Senate President said Nigeria, being a poor country, had no option than to borrow to fund its programmes – a statement that foreclosed any hope of restraint in what has become a culture in the management of the national economy.