In a bid to reduce the debt profile of Nigeria, the Director-General of the Debt Management Office (DMO), Patience Oniha, has urged the National Assembly to scrutinise the budget of the Federal Government.
Oniha said the federal government has been running a deficit budget for many years due to the capital and overhead components of the budget, which she stated the lawmakers must do due diligence on.
Recall that Nigeria’s public debt rose from N39.56 trillion recorded at the end of December 2021, to N41.6 trillion at the end of the first quarter 2022.
Prime Business Africa had also reported that the Minister of finance, budget and national planning, Zainab Ahmed, disclosed the federal government will borrow N9.32 trillion from domestic and foreign creditors to finance 2023 budget deficit.
According to Ahmed, the federal government will borrow N1.8 trillion from foreign creditors, and the remaining N7.4 trillion will be sourced from domestic creditors.
But during Oniha’s public hearing organised by the House of Representatives Committee on Finance to discuss the 2023-2025 medium term expenditure framework (MTEF) and fiscal strategy paper (FSP), she said the budget deficit has been a burden on the debt profile of Nigeria.
“Debt has grown and that has come really from the annual budget. There are three levels where those borrowings have increased. We have been running a deficit budget for many, many years.” Oniha said.
The DMO boss further explained that, “So, each time you approve a budget with a deficit by the time we raise that money because when you approve it is giving us a mandate, authority to borrow, it will reflect in the debt stock, so debt stock will increase.”