The Debt Management Office (DMO) has identified decades of operating budget deficits by successive governments as responsible for Nigeria’s high debt profile.
Director-General of the DMO, Patience Oniha, said this yesterday in Abuja.
According to her, a review of Nigeria’s fiscal data shows that not only has the government operated budget deficits which have been growing, but most of the deficits have been funded through local and external borrowing.
“The records show that deficits in the annual budgets, including supplementary budgets, rose to N10.78 trillion in 2023 from N1.62 trillion in 2015. Between 82 and 99 per cent of these were funded by new borrowing, ranging from N1.46 trillion in 2015 to N8.80 trillion in 2023. “These facts confirm that these budget deficits, funded by new borrowings, have been responsible for the rapid growth in the debt stock and the resultant increases in debt service,” she said.
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According to Oniha, this trend could have been avoided or moderated if revenues had been higher or expenditures lower. She urged the incoming government to take cognisance of the situation and prioritise increased revenue generation.
She added: “The budget deficits would have been much smaller, or Nigeria would have operated on a balanced budget. It is therefore imperative that the incoming government to consider the perennial budget deficits in the preparation of the Medium-Term Expenditure Framework (2024 – 2026) and the 2024 budget.
“The government should also accelerate the growth in revenues to ensure debt sustainability.”