National debt is N12trillion

Abraham Nwankwo

National debt is N12trillion

The Director-General of the Debt Management Office (DMO), a parastatal of the Federal Ministry of Finance, has stated, in a paper delivered at a one day Enlightenment workshop for the Nigerian Union of Journalists (NUJ) which held in Abuja yesterday, with the theme ‘Debt Sustainability and the Challenge of Financing Economic Recovery’, that Nigeria's debt profile for both domestic and external debts as at December 31,2015, stands at 12 trillion naira.

Mr. Abraham Nwankwo, Director-General of DMO added that the 2016 appropriation budget allows the government to borrow an additional 1 trillion, eight hundred and eighty four billion naira.

Giving a breakdown of the amount to be borrowed which includes external borrowing of N900 billion and domestic borrowing of N984billion naira respectively, he said, “The logic is to re-balance total public stock in favor of less costly external funds. The logic in the 2016 borrowing is to borrow from external sources to reduce the cost of debt servicing.

Nwankwo noted that there was nothing wrong in Nigerian borrowing because in modern economies almost every government runs deficit budget.

He further revealed that “the debt and overall economic sustainability can be significantly influenced by individuals and corporates bodies paying their taxefully”.

The DG revealed that the role of the debt management in the drive to economic change included dealing with the problem which is the economic recession caused by unfavourable structural change in the   global market for oil and gas.

He said the goal of the DMO is to cause a turn around through diversified self sustaining agriculture and agronomy processing,solid minerals,manufacturing and ICT with the funding implications to cost about USD25 billion per annum for the next 5-7 years.

Nwankwo noted that the major determinants to this goals will be addressing the huge infracstructural deficits speedily and effectively while depending on both the private and public sector to fund it.

He, however, was pessimistic as he said the private sector was uncertain and the public sector had been deeply undermined by the collapse of the dominant source in achieving this goals.