Fakoyejo Olalekan
The Debt Management Office (DMO) said Nigeria’s rising debt profile is due to the increase in the government’s budget deficits and inability to grow revenue.
According to the Director-General of DMO, Patience Oniha, the country’s budget deficit has increased from N1.62 trillion in 2015 to N10.78 trillion in 2023.
Join our WhatsApp ChannelOniha blamed the previous administrations and the current government, stating that successive governments have continued to increase budget deficits without a greater increase in Nigeria’s revenue.
She disclosed that the more budget deficits widen, the more Nigeria sinks into debt, as the country borrows to fund the deficits due to low revenue.
“The records show that deficits in the annual budgets, including supplementary budgets rose to N10.78 trillion in 2023 from N1.62 trillion in 2015.
“Between 82 percent and 99 percent of these were funded by new borrowing which ranged from N1.46 trillion in 2015 to N8.80 trillion in 2023.
“These facts confirm that these budget deficits, funded by new borrowings, have been responsible for the rapid growth in the debt stock and the resultant increases in debt service,” Oniha told NAN on Sunday, May 14.
She said an increase in revenue would have reduced budget deficits or the need to borrow, adding that a reduction in expenditure could have also curbed the hike in deficits, “The budget deficits would have been much smaller, or Nigeria would have operated on a balanced budget,” the DMO boss said.
Oniha went on to advise the incoming government to deliberate on the unending budget deficits when drafting next year’s 2024 budget and the medium-term expenditure framework (2024 – 2026).
The DG said to ensure debt sustainability, the government should grow revenues, “It is therefore imperative that the incoming government takes into account the perennial budget deficits in the preparation of the medium-term expenditure framework (2024 – 2026) and the 2024 budget.
“The government should also accelerate the growth in revenues to ensure debt sustainability.”
