By Tony Obiechina, Abuja
The Federal Government said yesterday that the nation would not be interested in relief from its N31trillion debts being canvassed for low income countries by International Monetary Fund (IMF).
Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, said at the public presentation of the 2021 budget, that Nigeria would not apply for such relief.
She said several loan agreements have been entered with various lenders, adding that asking for debt relief would portend “Nigeria as a country that cannot repay its indebtedness in the eyes of creditors”.
The Minister also defended the 2021 budget deficit, which she said, had “exceeded the Fiscal Responsibility Act threshold of three percent”.
President Muhammadu Buhari had presented a budget proposal of ₦13.08trn up by 22.9 per cent from the ₦10.8trn 2020 budget, with revenue projected at ₦7.5trn.
The budget deficit is projected to grow by ₦5.21trn, made up of Government Owned Enterprises and project-tied loans thus representing 3.64 percent of the Gross Domestic Product(GDP).
The ₦5.21trn budget deficit exceeds the three per cent GDP threshold prescribed by the FRA 2007 for the annual budget.
Ahmed said that although the 2021 budget deficit exceeded the three per cent threshold, the government has not breached the law.
“There is a provision in the Fiscal Responsibility Act that allows the government to surpass the threshold during unusual times”, she said.
Recall that the Debt Management Office (DMO), last month said Nigeria’s debt profile had increased by N2.38trn between March and June 2020, while the total public debt stock as of June 30, 2020, stood at N31trn.
Nigeria’s total public debt stock includes the debt stock of the Federal Government, the 36 states, and the Federal Capital Territory.
“The data shows that in naira terms, the total public debt stock which comprises the debt stock of the Federal Government, the 36 state governments and the FCT stood at N31.009trn or $85.897bn.
“The corresponding figures for March 31, 2020, were N28.628trn or $79.303bn.”
The debt office explained that the increase in the debt stock by N2.381trn or $6.593bn was accounted for by the $3.36bn budget support loan from the International Monetary Fund, new domestic borrowing to finance the revised 2020 Appropriation Act.
It said this includes the issuance of the N162.557bn Sukuk, and promissory notes issued to settle claims of exporters.
“The DMO expects the public debt stock to grow as the balance of the new domestic borrowing is raised and expected disbursements are made by the World Bank, African Development Bank and the Islamic Development Bank which were arranged to finance the 2020 Budget.
“Recall that the 2020 Appropriations Act had to be revised in the face of the adverse and severe impact of COVID-19 on government’s revenues and increased expenditure needs on health and economic stimulus, among others.”