Nigeria’s debt portfolio is inching towards N32.91 trillion as the Federal government has notified the National Assembly of a fresh plan to borrow N4.28 trillion to finance the 2021 budget.
The country’s debt stocks stands at N28.63trillion at the close of the first quarter 2020.
At the close of the first half of the year, only about 30 percent of the 2020 budged has been implemented.
The plan to borrow N4.28trillion is contained in the Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) forwarded to the Senate Tuesday by President Muhammadu Buhari for approval.
The final draft of the budget would be prepared based on the parameters and fiscal assumptions of the approved 2021-2023 MTEF/FSP.
In the fiscal document, the government projected the sum of N12.65 trillion for the 2021 budget.
It also projected the sum of N5.16 trillion as budget deficit for 2021 up from N4.98trillion in the 2020 budget.
The N5.16 trillion deficit represents 3.62 per cent of estimated GDP, well above the threshold of 3 per cent stipulated in the Fiscal Responsibility Act 2007, according to the document.
The government noted that the deficit would be financed by new foreign and domestic borrowing of N4.28trillion; N205.15billion from privatization proceeds and N674.11billion draw-downs on existing project-tied loans.
It said that the projected debt service/revenue ratio at 47 percent (actual for 2019 was 58 per cent) raises some concern about the sustainability of the government’s debt.
According to the government, the country is faced with a serious revenue problem rather than a classic debt problem.