Nigeria’s Local Debt Soars To N22trn As Buhari Seeks Fresh loan

Nigeria’s domestic debt has increased to N22.57 trillion as a result of President Muhammadu Buhari’s proposal for an additional N819.54 billion budget to cover costs for the current fiscal year 2022.

In his proposal, it was said that domestic borrowing will be used to pay for the N819.54 billion supplementary budget.

According to Buhari’s presentation on Wednesday, which was handed to the National Assembly for approval, the N819.5 billion additional budget will be used to repair various infrastructures across the country that had been damaged by floods.

The President noted in a letter read in plenary by the President of the Senate, Ahmad Lawan, that the extra budget was intended for the capital expenditure portion of the 2022 budget, resulting in a rise in the deficit to N8.17 trillion.

The letter stated: “At a time when harvest season had already ended, the year 2022 saw the worst flood catastrophe in recent memory, resulting in the catastrophic damage of farmlands.

“This might make the nation’s nutrition and food security problems worse. In addition to the 36 states and the Federal Capital Territory, the flood has destroyed bridges across the country that are essential for the transportation of goods and services.

The flood had an equal impact on the water sector, and certain ongoing vital projects that are now around 85% complete must be finished. The sector’s nine important projects include national projects for irrigation, dam construction, and water supply.

“I have approved a N819.536 billion additional budget for 2022, which is entirely made up of capital expenditures. The supplementary would be paid for by extra domestic borrowings, increasing the deficit to the GDP ratio to 4.43 percent and the budget deficit for 2022 to N8.17 trillion.

The Senate President quickly forwarded the proposal to the Senate Committees on Appropriations, Finance, Works, Water Resources, and Agriculture, 10 days before the New Year.

In order to pay some of the N6.26 trillion budget deficit, the Federal Government initially intended to borrow N5.01 trillion (with domestic debt estimated at N2.51 trillion).

The latest projected N819.54 billion domestic debt will bring the total domestic borrowing for the Federal Government in 2022 to N3.33 trillion.

The domestic debt stock of the Federal Government was N19.24 trillion as of December 2021, according to data from the Debt Management Office.

The domestic debt stock reached N21.55 trillion by September 2022, meaning that the Federal Government had already borrowed N2.31 trillion.

The Federal Government’s domestic debt increased by N13.15 trillion or 156.55% from N8.4 trillion as of June 2015 to N21.55 trillion as of September 2022 as a result of the extra borrowing of N819.54 billion.