‘Budget Deficits, Promissory Notes’: Why Nigeria’s Debt Stock Is Growing – DMO
During an appearance on Channels Television’s Sunrise Daily, Patience Oniha, Director-General of the Debt Management Office, discussed Nigeria’s budget deficit and increasing debt stock. Oniha explained that Nigeria has been running a budget deficit for many years, and has borrowed extensively from multilateral and bilateral sources, while also issuing promissory notes to settle obligations for which it has no revenue. While borrowing is an accepted way to finance government activities, Oniha noted that it must be balanced with revenue generation. She emphasized that when borrowed funds are used judiciously to promote growth, revenue will be generated to offset debt. The debt stock, which includes the debt of the 36 state governments and the Federal Capital Territory, is currently N46.25trn, with the Federal Government responsible for 84-85% of this amount. Oniha attributed the growing debt stock to Nigeria’s longstanding budget deficit, which is largely funded by borrowing, and promissory notes issued by the government to cover its financial obligations.