From Obasanjo to Buhari… how FG’s debt profile surged 658% to N26.9trn in 21 years

AUTHOR:Aderemi OjekunleJULY 31, 2021 11:22 PM

Nigeria’s public debt has been on the rise. Despite securing debt relief during the Olusegun Obasanjo-led administration, successive governments have continued on a borrowing spree — the federal government’s component of the public debt surging 658 percent to N26.9 trillion in the last 21 years.

This has raised concerns among Nigerians on the debt sustainability of the country amid dwindling revenue to meet the debt obligations to creditors.

Within two weeks, the senate approved three different loan requests by President Muhammadu Buhari.

On July 7, 2021, the upper chamber approved a loan request of N2.343 trillion, approximately $6 billion and another $8.3 billion and €490 million.Advertisement

Defending one of the loan requests, the Debt Management Office (DMO) said it is part of a borrowing plan for the 2021 budget.

“The proposed new capital raising is the new external borrowing provided in the 2021 Appropriation Act to part finance the deficit in the budget. In other words, the new capital raising has already been approved in the budgetary process by the executive and legislative arms of government,” the DMO had said in a statement.

As of March 2021, Nigeria’s total public debt has hit N33.1 trillion ($87.24 billion) — an accumulation of borrowings from successive governments, of which most were borrowed since the return to democratic rule in 1999. Advertisement

The overall public debt is the total debt accrued by federal, states, and the FCT from local and international lenders.

Of the N33.1 trillion, the federal government alone borrowed N26.91 trillion — this includes the FGN bonds, Sukuk, green bonds and Euro bonds.

Finally, after weeks of data aggregation, number crunching, dissecting and analyses of freedom of information (FOI) response from the Debt Management Office (DMO), TheCable presents findings that highlight how Nigeria’s aggressive borrowing defies its fiscal responsibility laws.

The analyses also include data from the DMO, National Bureau of Statistical (NBS), and fiscal papers from the Budget Office of the Federation.

FG DEBT CLIMBED 658% TO N26.9 TRILLION IN 21 YEARS

Data from the DMO seen by TheCable showed that federal government borrowings (local and foreign debt) climbed from N3.55 trillion in 1999 to N26.91 trillion at the end of March 2021 (the country’s latest official figure).

This represents a 658 percent increase in 21 years, comprising the administrations of Olusegun Obasanjo, Umar Musa Yar’Adua, Goodluck Jonathan, and the current Muhammadu Buhari.

HOW MUCH BUHARI BORROWED IN 6 YEARS

The Budget Office’s medium-term expenditure framework and fiscal strategy paper from 2015 showed that the Buhari-led administration incurred N7.63 trillion in domestic debt from June 2015 to December 2020.