The Debt Management Office (DMO) has identified borrowing as the only option to fund the 2018 budget and the capital projects, saying reliance on oil derivation is not sustainable.
Patience Oniha, Director-General of DMO made the submission while speaking at a public presentation of the Spring 2018 issue of the International Monetary Fund Regional Economic Outlook for Sub-Saharan Africa in Lagos on Monday.
Oniha disagreed with claims that Nigeria is an oil producing nation, arguing that benchmarking against country like Saudi Arabia is not tenable.
“We have since realised we should not be benchmarking ourselves against these countries,” she argued, explaining that “We [Nigeria] borrow because there is a revenue shortfall.”
“The national assembly passed the budget last week and we know it was higher than what the executive presented. So, as a debt manager, what I am looking for is to see where the funding of that incremental size may come in from,” she wondered.
The DMO chief noted that borrowings by the government were used for infrastructural purpose, insisting that for the 2018 budget to be delivered, it (government) would have to access credit facility.
“All of government’s borrowings were targeted at infrastructural development. Without borrowing, we won’t be able to deliver on the budget and I think we should be clear about that and a lot of that went into capital projects,” she stressed.
As at the end of December 31, 2017, Nigeria’s total debt stood at N21.73 trillion.
In 2017, the Federal Government, through the DMO, issued a number of debt instruments like the Sukuk, Savings bond, Eurobond and Green bond.
Proceeds from the Suku was used to fund the construction of 25 major roads across the country.