Debt office DG tells Nigerian govt to reduce borrowings, as Chinese debts hit $3.6bn

The Director-General of the Debt Management Office (DMO), Patience Oniha, has advised the Federal Government to prioritise revenue generation, and not increase borrowings.

During a workshop for Senators and House of Representatives on Thursday, Oniha said revenue growth should be accelerated and loans obtained should be invested in revenue-generating infrastructure to service debt.

Oniha disclosed that interest rate has risen, as obtaining loan in international and domestic market is now tight, “Thus, priority should be less on borrowing and more on revenue from oil and non-oil sources.”

According to her, “Nigeria’s public debt stock has grown consistently over the past decades and even faster in recent years. Consequently, debt service has continued to grow.

Read also:DMO defends Nigerian govt’s borrowings to fund fuel subsidy

“Nigeria’s low revenue base, compounded by dependence on crude oil, resulted in deficits over the past decades.”

Nigeria’s total debt stock was N35.46 trillion (86.57 billion dollars) at the end of Q2 2021, but closed the same period this year with N42.84 trillion ($103.31 billion), according to the National Bureau of Statistics (NBS).

Oniha also revealed the country’s debt to China stood at $3.6 billion, accounting for 3.6 per cent of the country’s external debt.

Explaining the impact of China’s loan, the DMO boss said, “The good thing is that Chinese loans are concessional. It is not our dominant source of funding,” adding “It is actually small but it finances infrastructure, which is a good thing.”

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