• Experts warn Buhari, propose revenue drive • FG’s recurrent rise 217% to N8tn

The Federal Government exceeded its borrowing by N1.15tn for the period between January and August 2022,

A copy of the public presentation of the 2023 proposed budget by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, showed that the Federal Government planned to borrow N6.10tn in 2022.

A breakdown shows that the Federal Government planned to get N3.53tn from domestic creditors and N2.57tn from foreign creditors.

According to the document, the Federal Government estimated that it would borrow N4.07tn between January and August 2022.

However, the Federal Government accumulated N5.33tn debt within the period under review, which is N1.15tn higher than the expected N4.07tn planned debt.

A further breakdown showed that the Federal Government borrowed N4.82tn from domestic creditors and N510.21bn from foreign creditors.

The debt from domestic creditors includes the Federal Government’s borrowing from the Central Bank of Nigeria through the Ways and Means Advances.

Ways and Means’s Advances are loan facilities through which the CBN finances the shortfalls in the government’s budget.

The Federal Government borrowed a total of N4.61tn from the Central Bank of Nigeria through Ways and Means Advances between January and August 2022.

This means that majority of the Federal Government’s domestic debt came from its debt to the CBN.

The CBN says on its website that the Federal Government’s borrowing from it through the Ways and Means Advances could have adverse effects on the bank’s monetary policy to the detriment of domestic prices and exchange rates.

“The direct consequence of central banks’ financing of deficits are distortions or surges in monetary base leading to adverse effects on domestic prices and exchange rates i.e macroeconomic instability because of excess liquidity that has been injected into the economy,” it says.

The World Bank had, in November last year, warned the Nigerian government against financing deficits by borrowing from the CBN through the Ways and Means Advances, saying this put fiscal pressures on the country’s expenditures.

Despite warnings from experts and organisations, the Federal Government has kept borrowing from the CBN to fund budget deficits.

Also, the N22.07tn owed the apex bank by the Federal Government is not part of the country’s total public debt stock, which stood at N42.84tn as of June 2022, according to the Debt Management Office.

recently reported the country’s debt rose by N30.72tn between July 2015 and June 2022, according to data released by the DMO.

According to the DMO statistics, Nigeria’s total debt as of June 30, 2015, stood at N12.12tn. By June 30, 2022, the figure had risen to N42.84tn, which showed an increase of 253.47 per cent. Despite the high increase in debt over the years, the government still plans to borrow N8.4tn in 2023.

Experts have kicked against the Federal Government’s proclivity for debt, which they have described as unsustainable.

An Abuja-based policy think tank, Agora Policy, said Nigeria’s debt was unsustainable and put the country in a perilous situation due to the high cost of debt servicing.

The group advised the government to deepen and diversify sources of revenue, re-calibrate expenditure to spend smartly, and invest efficiently.

A former President of the National Accountants of Nigeria, Dr Sam Nzekwe, agreed that Nigeria’s debt was unsustainable.