Modupe Gbadeyanka
By Modupe Gbadeyanka
Data from the Debt Management Office (DMO) on Wednesday, September 9, 2020, showed that the debt incurred by Nigeria rose to N31.0 trillion or $85.9 billion as at June 30, 2020.
The amount comprises the debt owed by the federal government and the 36 states of the federation, including the Federal Capital Territory (FCT).
Business Post observed that when compared with the first quarter of 2020, the total public debt stock of the country increased by 8.4 per cent or N2.4 trillion from N28.6 trillion or $79.3 billion.
The DMO attributed this rise to the $3.36 billion budget support loan from the International Monetary Fund (IMF), new domestic borrowing to finance the revised 2020 appropriation act including the issuance of the N162.6 billion Sukuk and promissory notes issued to settle claims of exporters.
In the statement, the debt office said it expects the public debt stock to grow as the balance of the new domestic borrowing is raised and expected disbursements are made by the World Bank, African Development Bank (AfDB) and the Islamic Development Bank which were arranged to finance the 2020 budget.
Recall that the 2020 budget was revised in the face of the adverse and severe impact of COVID-19 on the government’s revenues and increased expenditure needed on health and economic stimulus amongst others.
According to the DMO, additional promissory notes are expected to be issued in the course of the year, this, and new borrowings by state governments are also expected to increase the public debt stock.
In recent times, President Muhammadu Buhari has come under fire because of the hunger for his administration to borrow funds to finance the budget.
Recently, the loans obtained from China came under scrutiny, but the government quickly said it was necessary to seek for loans from different sources to carry out some critical projects in the country, especially because of a drop in revenue.
In order to boost earnings, the federal government this year raised the value-added tax to 7.5 per cent from 5.0 per cent, while prices of petrol and electricity were increased.
