…As domestic debt rises to N22.57 Trillion
Nigeria’s domestic debt has risen to N22.57 trillion as President Muhammadu Buhari has proposed a N819.54 billion supplementary budget to bankroll expenditures for this outgoing year 2022.
His proposal said the N819.54 billion supplementary budget would be financed through domestic borrowing.
According to Buhari’s Wednesday presentation, forwarded to the National Assembly for approval, the N819.5 billion supplementary budget would go to fix various infrastructures destroyed by floods nationwide.
The supplementary budget, as explained by the President in a letter read at plenary by the President of the Senate, Ahmad Lawan, was meant for the capital expenditure component of the 2022 budget with an attendant increase of deficit to N8.17 trillion.
The letter read, “The year 2022 has wi trillionessed the worse flood incident in recent history which has caused massive destruction of farmlands at a point already closed to harvest season.
“This may compound the situation of food security and nutrition in the country. The flood has also devastated road infrastructure across the 36 states and the FCT (Federal Capital Territory) as well as bridges nationwide that are critical for the movement of goods and services.
“The water sector was equally affected by the flood and there is a need to complete some ongoing critical projects that have already achieved about 85 percentage completion. The nine critical projects proposed in the sector cut across water supply, dam projects, and irrigation projects nationwide.
“I have approved a supplementary budget of 2022 appropriation of N819.536 billion, all of which are capital expenditures. The supplementary will be financed through additional domestic borrowings which will raise the budget deficit for 2022 to N8.17 trillion and deficit to GDP ratio to 4.43 per cent.”
The proposal, coming 10 days to the New Year, has been immediately forwarded by the Senate President to the Senate Committees on Appropriation, Finance, Works, Water Resources and Agriculture.
The Federal Government’s initial plan was to borrow N5.01 trillion (with domestic debt put at N2.51 trillion) to finance part of the N6.26 trillion budget deficit.
With the newly proposed N819.54 billion domestic debt, the Federal Government’s domestic borrowing is expected to hit N3.33 trillion for 2022.
Data from the Debt Management Office showed that the Federal Government’s domestic debt stock was N19.24 trillion as of December 2021.
By September 2022, the domestic debt stock had risen to N21.55 trillion, which means that the Federal Government had borrowed N2.31 trillion so far.
With the additional N819.54 billion borrowing, the Federal Government’s domestic debt rose from N8.4 trillion as of June 2015 to N21.55 trillion as of September 2022, an increase of N13.15 trillion or 156.55 percent under Buhari.
