The Chief Operating Officer of Financial Derivatives Company Limited, Bismarck Rewane, has sounded the alarm, saying Nigeria’s debt level suggests she is falling into a debt trap.
Rewane, a member of the Presidential Economic Advisory Council, who disclosed this in his presentation at September’s edition of the LBS Breakfast Session, said weak finance management practices and limited revenue has worsened the debt situation of the country, adding that domestic debt is also on the rise.
In a rare disclosure, the Minister of Finance, Budget and National Planning, Zainab Ahmed, said the debts of some states were not included in the current figures, which the Debt Management Office (DMO) had estimated at N33.26 trillion as of March 31, 2021, rising marginally from N32.93 trillion booked at the end of last year.
Last year, the federal government spent N2.43 trillion, which was 71 per cent of the amount available for budget funding on debt servicing, according to the budget implementation report released by the Ministry of Finance, Budget and National Planning some months ago.
According to Rewane, while debt servicing is rising and increasingly sapping the entire retained revenues of the government, incomes are falling.
“Adding to this complication is the fiscal deficit which is rising at an alarming magnitude. The Federal Government recorded an all-time high fiscal deficit of N6.6 trillion last year – an equivalent of 14.2 per cent of the 2020 GDP.
“The amount was also N2 trillion, that is 43.2 per cent, higher than the projected N4.6 higher and 57 per cent above the 2019 deficit. The shortfall was partly-financed through domestic borrowing to the tune of N2 trillion.
