DMO: Rising debt caused by budget deficits, low revenue

The Debt Management Office (DMO) says Nigeria’s growing debt profile is the result of years of operating budget deficits by successive governments.

Patience Oniha, director-general of the agency, spoke to NAN on Sunday in Abuja.

Oniha said a review of Nigeria’s fiscal data shows that not only has the government operated increasing budget deficits, but most of the deficits have been funded through local and external borrowing.

“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,” she said. 

“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.” 

The director-general added that if revenues had been greater or expenditures had been lower, the trend could have been avoided or at least reduced.

She asked the incoming administration of President-elect Bola Tinubu to take cognisance of the situation and prioritise increased revenue generation.

“The budget deficits would have been much smaller, or Nigeria would have operated on a balanced budget,” she said. 

“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.” 

The agency had pegged Nigeria’s total public debt at N46.25 trillion at the end of December 2022.