Suggestions




·

Quit Borrowing, Generate Revenue To Fund Government Activities, Says DMO

September 4, 2021
by
Nigeria's public debt
4 Reasons Buhari Depends On Loans - Nigeria's Debt Office

DIRECTOR-GENERAL of the Debt Management Office (DMO), Patience Oniha, has advised the Federal Government to quit the ongoing trend of borrowing to fund expenditure, urging government to explore viable options to generate revenue.

Oniha gave the admonition during a three-Day Interactive Session on the 2022-2024 Medium Term Expenditure Framework (MTEF) and Fiscal Responsibility Paper (FSP) at the National Assembly (NASS) on September 1, 2021.

Join our WhatsApp Channel

The DMO DG warned that it was not advisable to fund the government with borrowings, suggesting that borrowing should be for special purposes.

She urged the government to do more about revenue generation drive as Nigeria’s debt stock continues to rise due to new borrowings in the annual budget and also approved under the Medium Term External Borrowing Plan.

She revealed that Nigeria’s borrowing was high when the country went into recession, and it was based on the Economic Growth and Recovery Plan (EGRP) with the goal to bring the economy out of recession.

Oniha noted that the level of borrowing was coming down, however, not very significant.

“In 2020, when the Budget was revised because of the socio-economic implications of COVID-19, the borrowings shot up, by about double. So the new borrowings in the first 2020 budget was about N1.6 trillion, the revised budget about N4.6 trillion,” she said.

The DMO Chief added that in the Medium to Long-term, it is not advisable to fund the government with borrowings.

“Further, Nigeria’s debt stock has been growing because of new borrowings in the annual budgets and new borrowings approved under the Medium Term External Borrowing Plan, both of which are duly approved as provided for in the DMO Act and the Fiscal Responsibility Act.”

She explained that increased revenues will reduce the level of New Borrowings and the Debt Service-to-Revenue ratio, adding that borrowing should only be for priority projects and for revenue-generating projects.

She recommended the adoption of Public-Private Partnerships (PPP) arrangements to finance capital projects as part of increasing reducing borrowing to fund government projects.

“In addition to increasing revenues, we can achieve a reduction in new borrowings by actively using Public-Private Partnerships (PPP) arrangements to finance capital projects. The DMO is happy to note that there is now a tolling policy that was approved recently by FEC. This is one way to generate revenue.

“If we want to borrow to develop the economy, let us keep a sharper focus on generating revenues so that we do not spend all our revenues on Debt Service or even borrow to service debt,” Oniha urged.

 

+ posts

Kayode Shopekan

Related Posts

Previous Story

AfCFTA: Trade Minister Charges African Countries On Industrialisation

Next Story

Ahead Of October G20 Summit, Ministers Meet In Rome, Lazio

Featured Stories

Related Posts

Latest from News

Nigerian Govt To Probe Ajaokuta Steel N33bn Electricity Debt Amid TCN Disconnection

FG Advances $2bn China-Backed Plan to Revive Ajaokuta Steel

The Federal Government has stepped up high-level negotiations with Chinese investors to revive the 42-year-old Ajaokuta Steel Company, unveiling a proposed $2 billion investment anchored on a production-sharing model aimed at restoring large-scale steel manufacturing in Nigeria. Director-General and Global Liaison of
Nigeria,s GDP

Nigeria’s GDP Grows by 4.07% in Q4 2025 – NBS

Nigeria’s Gross Domestic Product (GDP) expanded by 4.07 per cent year-on-year in real terms in the fourth quarter of 2025, according to the latest report released by the National Bureau of Statistics (NBS). The growth rate is higher than the 3.76 per

Adamawa Governor Fintiri Swaps PDP for APC in Strategic Realignment

In a landmark political development, Governor Ahmadu Umaru Fintiri of Adamawa State has officially left the Peoples Democratic Party (PDP) to join the All Progressives Congress (APC), signalling a major shift in the state’s political landscape, Prime Business Africa reports. In a
Previous Story

AfCFTA: Trade Minister Charges African Countries On Industrialisation

Next Story

Ahead Of October G20 Summit, Ministers Meet In Rome, Lazio

Don't Miss

Unemployed youth20190322 660x400 1

Elumelu: Youth restiveness ticking time Bomb for Africa, others

The Chairman of the United Bank for Africa (UBA), Mr.

Barcelona Faces Likely UEFA Ban For Bribery Scandal 

Barcelona faces a nervous wait to find out if they