The Nigerian 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, according to the projections in the National Development Plan 2021-2025.
According to Punch, in the projections, President Muhammadu Buhari plans to accumulate about N12trillion debt in two years from 2021 to 2023.
The Debt Management Office had revealed 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.
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 disclosed 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.
The plan read in part, “The plan will require an investment of about N348.1tn to achieve the plan objectives within the period of 2021-2025. It is estimated that the government capital expenditure during the period will be N49.7tn (14 per cent) while the balance of N298.3tn (86 per cent) will be incurred by the Private Sector. Of the 14 per cent, government contribution, FGN capital expenditure will be N29.6tn (9 per cent) while the sub-national governments’ capita.
“The borrowing framework in the plan is 45 per cent each for both foreign and domestic borrowing while the other financing sources account for 10 per cent. Domestic bonds and concessional external loan financing, amongst others, will account for the borrowing strategies for the plan. Thus, the government will improve on current debt management strategies to ensure sustainability.”
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.
He said, “Even at the level that we are now, it is worrisome, not to talk of planning to borrow more. It is unfortunate that the government is always thinking of borrowing, instead of thinking of other ways to generate revenue.
“They can ensure that public-private partnership projects are built, once operational and yielding capital, though whoever implemented it can generate their money plus interest and then the project becomes ours and we can generate revenue from those. There are projects that we can scale down until we have enough funds to implement and there are projects that can generate money on their own.
“Instead of always thinking of borrowing, the government can go after those that owe the country, For instance, NEITI recently detected some money that is being held by some wealthy individuals, money that runs into trillions but the government isn’t going after those funds.”
He added that the government’s borrowing pace was not sustainable as revenue generated would be used to service debts.