DMO Warns President Bola Tinubu against taking a Loan on Nigerias behalf. They stated that the country won’t survive it. They went further to set new requirements for Tinubu to meet before borrowing.
President Bola Ahmed Tinubu must adhere to a list of requirements before borrowing, according to the Debt Management Office (DMO).
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According to DMO’s most recent assessment of the nation’s debt load in 2022, in order for Tinubu to borrow money, the government would need to raise its anticipated revenue from N10.49 trillion to almost N15.5 trillion.
According to the report, additional borrowing, FGN Ways and Means at the CBN, and anticipated Promissory Note issuance are all expected to cause Nigeria’s Public Debt-to-GDP Ratio to rise to 37.1% in 2023.
DMO expressed regret that, as a result of poor revenue, the estimated FGN debt service-to-revenue ratio of 73.5 percent for 2023 surpassed the advised limit of 50 percent.
This emphasizes how critical it is to substantially raise government revenue.
The Fiscal Responsibility Act of 2007 and the Central Bank of Nigeria Act of 2007 are two pieces of legislation that the DMO underlined as being crucial to follow in order to control the rate at which the public debt is growing.
The DMO also urged a focus on reforms and revenue mobilization activities to raise the tax revenue to GDP ratio for the nation.
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Additionally, it recommended promoting Public-Private Partnerships (PPP) to raise private sector investment for infrastructure projects and lowering borrowing costs by selling or privatizing government holdings.
The DMO’s caution serves as a reminder of the difficulties Nigeria’s heavy debt load presents.
