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Buhari’s $22.7bn loan raises Nigeria’s total debts to N33trn

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Buhari’s $22.7bn loan raises Nigeria's total debts to N33trn

Muhammadu Buhari

Total debt profile of Nigeria is now N33trillion after the approval of $22.7billion foreign loans requested by President Muhamnadu Buhari penultimate week, the Senate has disclosed.

This is even as the Director-General, Debt Management Office, DMO; Mrs. Patience Oniha informed that the effects of the ravaging coronavirus pandemic on the nation’s economy may affect the debt servicing.

Submissions to these effects were made on Monday at a one-day public lecture organised by the National Institute for Legislative and Democratic Studies, NILDS on “Public Debt in Nigeria: Trend, Sustainability and Management” in Abuja.

In his remarks at the event, the vice chairman, Senate Committee on Local and Foreign Debts, Senator Muhammad Bima Enagi (APC Niger South), said borrowing has always served as veritable financial platforms for many countries in running their economies, but judicious utilization of such loans for intended projects and servicing the debts appropriately have also been problems for some of the them, particularly the developing ones like Nigeria.

According to him, realities on ground in the country in terms of required infrastructures and debts accumulations between 2006 and now are not in any way connected.

The very reason, he explained, many Nigerians are worried whenever they hear that their government seeking for one loan or the other.

“From a low ratio of debt to gross domestic product, GDP of about 3.4 percent at independence, Nigeria’s total public debt as at September 30, 2019 according to the Debt Management Office, DMO stands at about N26.2 trillion (or $85.4 billion).

“Of this amount, total domestic debts is about N18 trillion (or $58.4 Billion) which is 68.45% of the total public debts. With the recent approval of the 2016-2018 External Borrowing Plan, the total debt stock would be about N33 trillion and 21 Debt/GDP ratio.

“The big question in the minds of average Nigerian aware of this fact is what did we do with the money? In other words, where did the money go?

“What do we have to show as a people for these huge debts accumulated over the last four decades or so, he queried.

He added that in stopping the ugly trend, the Senate and by extension, the National Assembly is more than determined to monitor the executive on prompt utilization of new loans being sought for, in saving the country from going back to pre-2005 and 2006 debt burden era by.

But the DMO boss in her remarks said there was no cause for alarm as regards the total budget profile of the country which put at $85.390billion or N26trillion as at September 2019.

According to her, though the country total debt stock as at 2006 when she exited the Paris and London Club of Creditors was $17.349million but yearly deficit budgeting and poor revenues generation , forced the country into taking loans thereafter which accumulated to N26trillion as at September last year .

“Concerns have been expressed about the growth in Nigeria’s debt stock since the exit from the Paris and London Club of Creditors. It is true that the Public Debt Stock has grown from US$17,349.69 million in 2006 to USD85, 390.82 million as at September 30, 2019.

“However, it must be recognised that the current Debt Stock is the result of cumulative borrowings by successive Governments to finance budget deficits and various Infrastructure Projects,” she said.

 

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