Nigeria’s Debt Management Office (DMO), has disclosed that the federal government will borrow N1.549 trillion from domestic and international markets to fund the 2020 budget.
Patience Oniha, Director-General of the DMO, on Friday, told journalists that N805 billion will be borrowed externally, while N744 billion will be borrowed from the domestic market.
Oniha said N150 billion of the required funds will be sourced through the sale of Sukuk bonds.
President Muhammadu Buhari approved a record 10.59 trillion naira ($34.6 billion) budget for 2020 in December, returning the country to the January-December budget cycle.
However, the budget has a deficit of 1.52 per cent of the estimated gross domestic product, while crude production is assumed at 2.18 million barrels a day with an oil price of $57 per barrel.
The Nigerian government had always complained that the country is broke, and has resorted to policies to help boost the country’s revenue.
But critics have said government spending is reckless, with local and international organisations also expressing concerns over the current administration’s borrowing adventure.
When Buhari took over in 2015, Nigeria’s debt has increased from $63.81 billion, to $83.88 billion by June 2019.
The country’s debt has grown more than double from N12.12 trillion in June 2015 to N25.70 trillion in June 2019, due to the devaluation of naira, which occurred within the period.
A dollar exchanged for naira at N196.95 as at June 2015, but in June 2019, the rate weakened to N306.4 per dollar.
While the government agrees that the country’s debt has grown to $83.88 billion, which is made up of $27.163 billion in external debt and $56.72 billion owed domestically, it blames currency fluctuations for the varying accounts of Nigeria’s debt.