Nigeria’s Debt to Hit N38.6 Trillion By December 2021

Nigeria’s total public debt may hit N38.68 trillion by December 2021, the Minister of Finance, Budget and National Planning, Zainab Ahmed, has said.

The projection, she said, is based on existing approvals.

The minister stated this on Tuesday when she appeared before the Senate Committee on Local and Foreign Debts.

Her comments come amidst growing concerns over Nigeria’s debt stock. This is even as the nation plans to fund the 2021 budget deficit with N4.28 trillion new borrowings which represents about one-third of the proposed budget.

In the 2021 budget presented to the National Assembly in October, President Muhammadu Buhari proposed N13.08 trillion expenditure for the next fiscal year. He also announced that total federally distributable revenue is estimated at N8.433 trillion in 2021 while the total revenue available to fund the 2021 Federal Budget is estimated at N7.886 trillion.

In her presentation, Ms Ahmed said the total public debt stock comprising the external and home debts of the federal and state governments and the Federal Capital Territory stood at N31.01 trillion ($85.90 billion) as of June 30.

“It is projected, based on existing approval, to rise to N32.51tn by December 31, 2020 and N38.68tn by December 31, 2021.”

She further explained that the proposed N4,28 billion borrowing, was broken down equally between Domestic Borrowing of N2.14 billion and External Borrowing of N2.14 billion.

The 2021 Appropriation Bill has a provision of N3.12 trillion for Debt Service. Domestic Debt Service has a provision of N2.18 billion while External Debt Service has a provision of N940.89 billion.

While she blamed abandoned road projects across the country on poor fund releases, she explained that the current SUKUK fund of N162 billion is for 45 roads cutting across the six geopolitical zones.

“I am one person that feels that we should just take one major road in one geopolitical zone and finish it. We were not able to do that because of the processes in which appropriation is made both at the executive as well as the legislative arms of government.

“But truly, if we are able to just take one or two projects at a time and complete it before going to the next one, it will be better. What the contractor does is the bit that has been cut out for him to do in that particular area.

“Once the fund is released and it is finished, we stop again. That’s the consequence of these numerous projects that we put in the budget. It is not related to Sukuk-funded projects alone; it cuts across all the projects,” she complained.

She wondered how projects can be completed with inconsistency in the release of funds.

“You will see a road that costs, maybe, N5 billion, and you will see a provision for N100 million, N200 million or N300 million. Of course, the project will never finish. After two years, the contractor comes back and asks for variation, and the amount keeps growing.

“I wish that we get to a point when we sit down as a government and agree that, let us select a few projects, finish them in 2020, and then in 2021, we select the next. So that on a geopolitical basis, those selections are done as a collective process.”

The minister, however, said work on the legacy projects, Lagos-Ibadan highway, Second Niger Bridge, East-West road, and Abuja-Kaduna-Kano road, is ongoing without stop because funds were available and that they were few. And these projects, she said, were assigned to the Nigeria Sovereign Investment Authority.