Stakeholders To FG – Take Urgent Steps To Halt Nigeria’s Rising Debt

As the national debt stock rapidly increases, some business stakeholders are advising the government to take steps to halt its rise.

The stakeholders who spoke with the News Agency of Nigeria (NAN) advised the Federal Government to look inwards and device creative means of generating revenue rather depending on borrowings.

NAN reports that the Debt Management Office (DMO) recently announced that the country’s total debt stock as at December 2021 was N39.55 trillion.

The DMO had also said that the debt stock was likely to hit N45 trillion in 2022, as the government planned to borrow additional N6.30 trillion to finance the 2022 budget deficit.

Patience Oniha, the Director-General of the DMO, had explained that the overall deficit in the 2022 budget was N6.30 trillion, representing 3.46 per cent of the country’s Gross Domestic Product (GDP).

Oniha explained that the debt stock was made up of the domestic and external debt stocks of the Federal Government, the 36 state governments and the Federal Capital Territory.

She said that the country did not really have a debt problem, but a revenue problem, adding that the government was already taking practical steps to improve revenue and reduce borrowings.

A breakdown of Nigeria’s public debt stock shows that 37.82 per cent is external, while the balance of 62.18 per cent is domestic.

With the country’s national debt in relation to Gross Domestic Product (GDP) at 35.51 per cent, some analysts suggested that the debt situation was still within reasonable limits.

However, World Bank research shows that a debt-to-GDP ratio greater than 77 percent for an extended period of time may negatively impact economic growth.