In a brief summary of his term in office, outgoing President Muhammadu Buhari stated that he is not ashamed of plunging Nigeria into a N77 trillion debt.
Recall that the Debt Management Office (DMO) had predicted that President Muhammadu Buhari will leave a massive debt of N77 trillion for the new administration as a result of the government’s continued borrowing.
The agency’s director, Patience Oniha, stated that fresh borrowings of 10.57 trillion naira were included in the 2023 budget during a public presentation of the budget for that year at the National Assembly on January 4, 2023.
According to the data that was available, government bonds, savings bonds, treasury bills, Sukuk, and green bonds make up almost 60% of the total amount of internal debt, or debt that is not covered by external borrowing.
Government promissory notes to enterprises that received export expansion grants account for 2.3% of all internal loans.
Industry analysts assert that whomever succeeds President Buhari would have difficult economic decisions given the escalating budget deficit and the fact that the 2023 budget is intended to be a deficit document that will be financed by borrowing.
According to a recent data study by the Budget Office of the Federation, President Buhari’s total budget deficit is projected to reach N47.43 trillion.
The research includes projected and actual budget deficits for the fiscal years 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022, and 2023.
The findings show that deficit financing increased from N2.41 trillion in 2016 to N11.34 trillion in 2023, an increase of 370.54 percent.
In the third and fourth quarters of 2015, total deficit financing amounted to N841.48 billion. It rose to N2.41 trillion in 2016, N3.81 trillion in 2017, N3.65 trillion in 2018, N4.18 trillion in 2019, N6.59 trillion in 2020, and N6.44 trillion in 2021.
While the total deficit for 2022 has not been released, the Budget Office expects the figure to hit N8.17 trillion (of which N6.37 trillion had been spent by November 30, 2022). The office also anticipates a high deficit financing of N8.17 trillion for the 2023 fiscal year.
Between the third and fourth quarters of 2015, 2016, 2017, 2018, 2019 and 2020; the first three quarters of 2021, and the first four months of 2022, the Federal government spent N23.66 trillion on personnel costs, pensions, overhead costs, presidential amnesty programme, other service-wide votes, and special interventions.
However, in a statement released on Saturday, May 27, 2023, Buhari urged Nigerians to analyze the debt profile while also taking into account the nation’s assets and investments.
The president claimed that under his leadership, Nigeria’s infrastructure stock as a percentage of GDP increased from roughly 20 to over 40 percent.
The president said the growth is “no small undertaking” in the message that was shared on Twitter.
According to him, this happened during a worldwide oil price collapse, a national recession, and a war in Europe.
“So, as we look at Nigeria’s debt profile, I urge us to also look at the assets and investment profiles, some of which was paid for by debt and some by investment income,” he said.
“The wealth and prosperity of many nations, especially post-war Europe, was built largely on infrastructure and on debt redeemed over decades. Some of the projects are commercially self-liquidating.”
Buhari added that without investing in infrastructure, the road out of poverty is a much tougher one.
In eight years, I am proud to say that we have doubled Nigeria’s stock of infrastructure to GDP from about 20% to over 40%, and that is no small undertaking.
— Muhammadu Buhari (@MBuhari) May 27, 2023
Without investing in infrastructure, the road out of poverty is a much tougher one.
— Muhammadu Buhari (@MBuhari) May 27, 2023