The Debt Management Office (DMO) has assured that it will not exceed the new loans legally approved in the 2023 Appropriation Act.
The DMO was reacting to reports that the Federal Government had borrowed N2.13 trillion between January and February this year through the issuance of regular bonds, retail savings bonds and treasury bills.
The report also raised alarm that at this rate, the country could exceed the estimated domestic debt of N7.04 trillion by 2023.
In January 2023, the government raised N662.617 billion through regular bond auctions, N277.468 billion through Nigerian Treasury Bills (NTBs) and N533.03 million through Federal Government of Nigeria Savings Bonds (FGNSBs), monthly retail loans. published in 2017.
This month, the government raised N770.56 billion through bond auction, N417.064 billion through NTB and N1.271 billion through FGNSB.
But in a reaction posted on the website, the DMO said the domestic issuance program is designed not only to provide funds to finance the budget deficit, but also to refinance FGN’s maturing obligations during the fiscal year.
“Thus, while a total of N2.129 trillion has been raised in January and February from the issuance of FGN bonds, Nigerian Treasury Bills and FGN Savings Bonds, only N1 trillion has been deployed for deficit financing, which represents 14.2 percent of the total requirement. N7,043 trillion for this year.
“It should be noted that the balance of funds collected is for refinancing maturing obligations,” said the DMO.
According to the DMO, while maximizing the opportunity provided by the strong demand of investors to raise funds to facilitate the early implementation of the 2023 budget, it must be guided by the law and therefore cannot exceed the new loans legally approved in the Appropriation Act.
Nigeria’s total public debt stood at N44.06 trillion in the third quarter of 2022, and is expected to reach N77 trillion by May this year. This has fueled a long-running national debate about the growing amount of debt and the burden of sustainability amid declining national incomes.
The Federal Government is seen tapping into the domestic capital market to finance the N8.8 trillion regular debt component of the N10.78 trillion deficit in the 2023 budget due to the downgrade of the sovereign by global rating agencies, with a higher risk profile. and fees for international debt issuance.