36 Nigerian states, FCT responsible for debt

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The Debt Management Office (DMO) on Tuesday explained that the Total Public Debt Stock, that is the External and Domestic Debt of the Federal Government, which it recently would be about N77 Trillion by May 2023 includes that of the thirty-six (36) State Governments and the Federal Capital Territory.

The Director-General DMO Patience Oniha has been in the news recently following her statements to the effect that the next administration will inherit a public debt of N77 trillion if the N23 trillion loans from the Central Bank of Nigeria (CBN) to the Federal Government are securitised.

At the Public Presentation of the 2023 Appropriation Act by the Honourable Minister of Finance, Budget and National Planning Hajia (Dr) Zainab Shamsuna Ahmed, one of the participants asked a question on the projected level of debt stock by May 2023 when the tenor of the current administration would come to an end.

But the DMO in an explanatory statement on Tuesday stated:

“In a quick response to the question, the Director-General of the Debt Management Office, DMO (DG-DMO) explained that using the actual Public Debt Stock of N44 Trillion as at September 30, 2022 as a basis and taking into account a number of on-going activities, the Total Public Debt Stock, that is the External and Domestic Debt of the Federal Government, thirty-six (36) State Governments and the Federal Capital Territory would be about N77 Trillion.”

In what the debt office said is an explanation of what the DG said, it noted that the DG DMO had explained that the Debt that will be added to the Public Debt Data in 2023 include the N1 Trillion Ways and Means Advances to finance the Supplementary Budget which has already been approved by the National Assembly (NASS) and N22.72 Trillion Ways and Advances currently under the consideration by NASS.

” The projected Debt Stock for May 2023 also includes N5.567 Trillion representing about 50percent of the New Borrowing of N11.134 Trillion in the 2023 Appropriation Act as well as New Promissory Notes estimated at N1.5 Trillion to be issued to settle arrears of the FGN and judgement debts. Also included are estimates for new borrowing by the State Governments and FCT.

“From these figures, it is clear that the Ways and Means Advances of N22.72 Trillion which represents funds already spent, is the largest source of the increment.

She added that the securitisation of the Ways and Means Advances will enable the DMO to include the debt in the Public Debt Stock thereby improving Debt transparency,” the statement read in part.

Undead, in her earlier statement last week Thursday, Mrs Oniha noted that Nigeria’s total debt stock rose to N44.06 trillion as of the end of September 2022, largely reflecting the weakness of the local unit, Naira.

She added, however, that should the CBN loans be added to the debt profile, the nation’s debt portfolio would increase significantly.

“Considering reports that the next administration may inherit a total public debt stock of about N77 trillion, the estimated figure can be expected only if the Ways and Means Advances from the Central Bank of Nigeria are securitized,” she had said.