Mrs. Zainab Ahmed, Minister for Finance, Budget and National Planning, has revealed that Federal Government borrowed 6.7tn from January to November 2021. She disclosed this in her presentation of the 2022 approved budget.

Zainab Ahmed disclose Nigeria’s debt stock.

According to the presentation document, the recent borrowed funds consist of N5.1tn domestic debt and N1.6tn. However, the domestic debt includes that owned by the Central Bank of Nigeria. Sometimes in March 2021, the Debt Management Office had revealed that the country’s total public debt stock was N32.9tn and now an additional N6.7tn loan inclusive, making the total public debt stock about N39.6tn as of November 2021.

Going further, the Debt Management Office had disclosed that the country’s total public debt increased to 33.1tn at the end of the first quarter of 2021, from N32.9tn in December 2020, showing an increase of about 200bn. Q2 2021, the total debt stock rose by N2.4tn to N35.5tn by June 2021.

It’s continued to increase by N2.5tn to hit N38tn by Q3 2021. According to the minister’s presentation, an increase of N1.6tn rose from September to November 2021.

Report shows that within the 11-month period, debt servicing had rose from N4.2tn which represents 76.2 per cent of the N5.51tn revenue generated during the period.

Mrs. Zainab Ahmed, defended government borrowing and the country’s debt level, stating that the country had a revenue challenge, and not a debt problem, adding that the debt level was still within sustainable limits.

She said, “This is to restate, that the debt level of the Federal Government is still within sustainable limits. Borrowings are essentially for capital expenditure and human development as specified in Section 41(1)a of the Fiscal Responsibility Act 2007.

“Having witnessed two economic recessions we have had to spend our way out of recession, which contributed significantly to the growth in the public debt.  “It is unlikely that our recovery from each of the two recessions would have been as fast without the sustained government expenditure funded partly by debt.” She added.

Former Deputy Governor of the Central Bank of Nigeria and former presidential candidate, Kingsley Moghalu, and also economic experts had hit back a the minister.

Moghalu had said, “There are many ways through which we can improve Nigeria’s domestic revenue situation without selling the future of our country. As to the argument that Nigeria does not have a debt problem but a revenue problem, that is mere sophistry. If you’re spending 90 kobo of every one naira you earn repaying debt, you are insolvent.

You cannot say that we have a debt-to-GDP ratio that allows you to continue borrowing. No! That is an argument for sustainable economies. You cannot be comparing Nigeria with advanced economies. We are in an economy that is still very basic.

“If you are not earning enough revenue, why are you borrowing? You are just compounding your problem. Why don’t you focus on where to get the revenue from instead of lazily ignoring that problem and just trying to survive with borrowing?

If an individual was living a life that way, it would be a calamity. That is why Nigeria is in a calamitous situation today economically,” he said.

However, it must be noted that the World Bank had earlier said, that Nigeria debt was costly and the country’s debt was at risk of becoming unsustainable. The government should work on a possible solution to work the debt out.

Zainab Shamsuna Ahmed born 16 June 1960 is a Nigerian accountant who has been serving as Minister of Finance, Budget and National Planning since 2019. At the time, President Muhammadu Buhari brought the two ministries under her as one, making her the de facto Minister of Economy.

“The Federal Ministry of Finance is the government body that manages the finances of the Federal Government of Nigeria, including managing, controlling and monitoring federal revenues and expenditures. Roles of finance ministry: Some of the role of the finance ministry include collecting and disbursing government revenue, formulating policies on taxation, tariffs, fiscal management etc., preparing and managing the annual budget, preparing annual accounts for ministries, departments and agencies, managing federal debt and regulating the capital market. The Ministry of Finance is responsible for a number of parastatals and agencies:

Office of the Accountant General of the Federation of Nigeria

Federal Inland Revenue Service

Investment and Security Tribunal

National Insurance Commission

Nigerian Export Import Bank [NEXIM]

Nigeria Deposit Insurance Corporation

Nigerian Customs Service

Security and Exchange Commission”. This section is culled from WIKIPEDIA.