Nigeria’s Debt Burden Continues Unrelenting Surge, Buhari Still Ready To Borrow More

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By Elizabeth hukwuma

 With barely two months for President Muhammadu Buhari, second term in office, to elepase, Nigeria’s domestic and external debts  appears to be growing in lips and bounds going by records from the Debt Management Office, DMO under the close watch of Patience Oniha.

The Katsina state born Nigerian President may not have had the opportunity to borrow from external sources like the Paris Club of Creditors, London Club of Creditors, Multilateral Financial Institutions, China Development Bank, China Exim Bank or Promissory Note Creditors which are the refinanced,  trade arrears , Bilateral and Private Creditors. This is because Bukola Saraki, a former governor of Kwara state and one-time Senate President did not give him room to do so in his first term in office.

The emergence of Ahmad Lawan, the Yobe state born Politician as the Senate President in the  9th National Assembly which coincided with his second term in office may have opened the floodgate for him to borrow locally and externally, without restraint, thus throwing Nigeria into  huge debt, that would remain a burden to the children yet unborn.

The Nigerian Bureau of statistics, NBS, has reported the nation’s public debt, which includes domestic and external debt stocks of both the Federal and the 36 states government, including Abuja, the Federal Capital Territory, FCT had hit a mark of $103.11 billion or N46.25 trillion under the Buhari Administration as at December 31, 2022 as against $95.77 billion, recorded during the same period in 2021.  Going by the  NBs,report in terms of composition, the total domestic debt stock, alone stood at  N27.55 trillion while the  external the external debt  stood at  $41.69 billion or N18.70 trillion.

 The DMO Authorities had aid that the country’s debt stocks have continued to grow in lips bounds over the last seven years. The Federal government, according to the DMO most recent report had borrowed N2.13 trillion between January and February 2023 through the issuance of Domestic FGN, securities, thus bringing the country’s debt burden to N47.38 trillion as at February 25, 2023.  An informed source at the DMO, disclosed that the rate of borrowing by the Buhari Administration, may exceed its domestic deficit funding requirement by of N7.043 trillion this 2023.

Mrs.Oniha: DG, DMO

Given reasons for the increase in the nation’s debt stock, a top official of the DMO, has linked it to the new borrowings by the Federal government and the state governments, primarily to fund budget deficits and execute projects. The issuance of Promissory Notes by the FGN, to settle some liabilities was said to have also contributed to the growth in the nation’s debt stock burden.

 Take for instance, between January and February, 2023,   the FGN, was said to have raised the sum of N2.13 trillion through the issuance of Bonds, treasury Bills, and Savings Bond.  It was gathered that only N1trillion of the said amount raised was deployed for budget deficit financing,representing 14.2% of the total requirement of N7.043  trillion  for the year.  The DMO, source had said that the balance of the funds raised within the two months, would be used for refinancing maturing obligations.

 A source disclosed that Buhari may have been encouraged to take pleasure in borrowing because of the support of the National Assembly Lawmakers who are benefiting from it. Ahmad Lawan, the Senate President had said that the salaries and emoluments of a Senator is N1.5 monthly while the House member earns N1.3 million as salary. Note the Senate President, Speaker of the House of Representatives and other Principal officials of the two Chambers of the National Assembly are also well paid, going by records from the Federation Account Allocation Committee, FAAC.

    The Value News source had said that the monthly salaries are outside the allowances ranging from costs of Local /foreign trips, consulting of professional services, medical services, Constituency Projects, sitting and oversight allowance. This is un addition Residential, Wardrobe Allowances, office stationeries, computers, Newspapers and Magazines, maintenance of motor vehicles, and office equipment, which runs into billions of naira on a yearly basis. 

Lawan, the Nigerian Senate President   would not agree that the N13.5 million for Senators and N8million for House members as running cost, makes the nation’s National Assembly   the costliest to maintain in a Presidential System of government but he insists that it is the lowest compared to the North American country of the United States, US, take home pay of Lawmakers and other parts of the world.

 For the 2023, Fiscal budget allocation, the Nigerian President had proposed N169 billion for the Lawmakers, which was said to have increased to N228.1 billion by the Lawmakers before it was finally approved and transmitted to the President for his assent.  This is what obtains at the National Assembly when the Nigerian President requests the Lawmakers approval to borrow external Financial Institutions.  

It is not surprising why the Lawmakers do not see anything wrong with the too many requests of the Buhari, who is on his lap, to borrow from Multilateral Financial Institutions, as they were said to have approved for the Nigerian President to borrow $973,474,971.38, from China Development bank recently.  The approval is coming on the heels of the China-Exim Bank’s decline of an earlier agreement to grant to the Nigerian government a loan of $22,798,446,773, earlier approved by the National Assembly this year.

 The China Exim Bank officials, may have  read the  handwriting on the wall that the bank may have difficulty in  recovering the huge loans so soon  t  as the new Administration of Asiwaju Bola Ahmed Tinubu, may not want to concentrate in servicing the country’s debt stock immediately on assumption of office on May 29, 2023, but to concentrate  in repairing the country’s damaged economy.

Tinubu: President -elect, Faces Huge Debt Burden To Service

Many believe that if the the Buhari’s Administration had invested much of the money borrowed from Multilateral Financial Institutions on the nation’s health and educational sectors, the problems in these sectors would not have become so pronounced that could force the medical Doctors or the Academic Staff Union of Universities, ASUU, to embark on strike on the slightest disagreement with the government over unsettled allowances. The China Exim Bank rejection of the release of the Nigerian Government loan request may have sent a signal to the 9th National Assembly Lawmakers that there will be no care to share. 

 Aware that the China Exim Bank  may  not  grant any  Loan to the   Nigeria government for now, may have informed  why Abubakar Fulata,  Chairman,  House Committee on Rules and Business, has moved a motion  for the Legislative Chamber ‘’ to amend its resolution  granting  approval  to the failed  Commercial deal’’  but that was how far the Committee could go.

The refusal of the China Exim Bank to grant $22,798,446,773, may have  discouraged the  government  from going ahead  with a review of the minimum wage of N30,000.00, but leave it ,for  Tinubu, the incoming President to handle. Chris Ngige, a former governor  of Anambra state and the outgoing minister of Labour and Employment, who was a member of the Committee  that had Negotiated  the country’s present minimum wage  from N18,000.00 to N30,000.00 had said  that the country’s minimum wage should be be reviewed every five years’’ to fit  current standard of living’’.

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