The Debt Management Office has commended President Bola Tinubu for his economic focus on improved expenditure as a way of reducing public debt levels.
The Director-General of the DMO, Patience Oniha, said this in an interview with newsmen on Friday in Abuja.
Oniha cited the removal of petrol subsidy and the unification of rates in the Foreign Exchange market, as steps capable of boosting revenue and reducing new borrowing.
She called for increased investment in infrastructure as key to economic growth and development, adding that Public-Private Partnership (PPP) was a more viable option for infrastructure development.
However, report shows that the DMO recently released the Market Access Country-Debt Sustainability Analysis (MAC-DSA) for 2022. MAC-DSA is a template used to analyse debt levels to determine future debt sustainability.
The DMO stated that the analysis of the results of the 2022 MAC-DSA showed that the Total Public Debt-to-GDP ratio was projected to increase to 37.1 per cent in 2023 relative to 23.4 per cent as of September 2022.
It said that the proposed increment was due to the inclusion of the N8.80 trillion in new borrowings for the year 2023, and the Ways and Means Advances at the Central Bank of Nigeria of over N23 trillion.
It also listed estimated Promissory Notes issuance of N2.87 trillion in the debt stock under the baseline scenario.
“The Country’s debt stock remains sustainable under these criteria.
“But the borrowing space has been reduced when compared to the Nigeria’s self-imposed debt limit of 40 per cent set in the Medium-Term Debt Management Strategy (MTDS), 2020-2023.
“On the other hand, Debt Service-to-Revenue ratio at 73.5 percent in 2023 exceeds the recommended threshold of 50 per cent due to low revenue, which means that there is need to significantly increase government revenue.
“Under the alternative scenario, the total public Debt-to-GDP ratio at 45.4 per cent in 2023 exceeds the Nigeria’s self-imposed debt limit of 40 percent” it said.
