Nigeria’s Public Debt + FG Borrowings from CBN Ways & Means = N60trn
Nigeria’s true total public debt equals N41.604 trillion declared on the Debt Management Office (DMO) website plus unsecuritised Ways and Means funds provided by the Central Bank of Nigeria.
If there is a question as to how much is Nigeria’s true public debt, responses will vary among stakeholders. Whether deliberate or a matter of oversight, Nigeria’s total public debt is under-declared.
In reality, about N42 trillion declared by Debt Management Office as total public debt is actually two-thirds of Nigerian exposure when considering the backdoor funding from the Central Bank of Nigeria.
The lender of last resort has persistently stood behind the federal government to help close funding gaps due to fiscal slippages while recurrent expenditure maintains a steep rise.
Compare with the previous administration, CBN has been persistently in breach of its own Act on Ways & Means window overdraft to the Nigerian government. Stakeholders expect about N23 trillion to be securitised to know Nigeria’s true debt position – as of June.
Godwin Emefiele, the current CBN Governor has discoloured the apex bank’s independence with his political rapport – it appears as the first of his kind since 1999. READ: DMO Tasks FG on Better Revenue Drive to Reduce Borrowings
Africa’s largest economy’s earnings power is relatively limited by global prices of oil and volume production. As a member of the Organisation of Petroleum Exporting Countries, Nigeria’s quota for 2022 is agreed at 1.8 million barrels per day.
Unfortunately, the country has continued to underperform the supply expectation due to weak investment in oil infrastructure.
The latest data from the OPEC monthly report and the National Bureau of Statistics indicate the crude oil production volumes have been underperforming the oil groups’ quota since the beginning of the year.
The latest data shows that Nigeria’s production volume averaged 1.238 million barrels per day at a time when global prices of crude remain steady. But the nation which depends largely on hydrocarbon inflows missed the boom period, the development that has triggered a decline in fiscal revenue performance in 2022.
With Nigeria’s fiscal slippage record seen in the year, it is not impossible for the government to raise more than total sum provided for in the budget. Budget deficits have become a norm in Africa’s largest economy. Unfortunately, revenue generation flows remain under pressure – from external and internal influence – especially rising oil theft.
In the first six months of the fiscal year 2022, Ways and Means’s support to the Nigerian government was posted at N2.45 trillion, according to the CBN. Agusto&Co predicted that government borrowing from the CBN is expected to rise further to N23.2 trillion, lifting local currency debt to about N46 trillion by the end of this year. #Nigeria’s Public Debt + FG Borrowings from CBN Ways & Means = N60trn
