According to Patience Oniha, director general of the Debt Management Office (DMO), by the time President Muhammadu Buhari’s term expires in May, the new administration would have inherited roughly N77 trillion in debt.

Oniha made these remarks while answering questions from reporters on Wednesday during a public presentation and breakdown of the highlights of the 2023 appropriation legislation in Abuja.

The deficit for 2023 is estimated at N11.34 trillion, and Buhari approved a N21.83 trillion budget on Tuesday.

In percentage terms, the deficit is equal to 5.03 percent of GDP.

According to Minister of Finance, Budget and National Planning Zainab Ahmed, the federal government would borrow money to cover the deficit.

The minister has stated that 22% of expected income will come from oil-related sources, while 78% will be collected from non-oil sources, to cover the N11.34 trillion 2023 budget shortfall.

According to Ahmed, N7.04 trillion would be borrowed from domestic sources, N1.76 trillion from foreign sources, N1.77 billion would be drawn down from multilateral and bilateral loan sources, and N206.18 billion would be provided by earnings from privatization to cover the deficit.

Meanwhile, in the first ten months of 2022, the federal government borrowed N6.3 trillion from the Central Bank of Nigeria (CBN).

The Central Bank of Nigeria (CBN) funds government deficits through the Ways and Means credit program.

The federal government had promised to issue securities like treasury bills and bonds in October 2022 to pay off the N20 trillion in debt owed to the Central Bank of Nigeria (CBN).

However, during the budget presentation, Oniha stated that the N77 trillion debt was a result of the federal government’s decision to securitize the loans (ways and means) from the central bank.

The DMO reported that Nigeria’s national debt was at N44.06 trillion as of the third quarter of 2022. However, the federal government still intends to borrow additional money to pay for the supplemental and 2023 budgets.

“There are a lot of discussions on the ways and means. In addition to the significant cost saving in loan service we would get by securitising it, there is an element of transparency in the sense that it is now reflected in the public debt stock,” she said.

“Once it is passed by the national assembly, it means we will be seeing that figure included in the public debt. You will see a significant increase in public debt to N77 trillion.

“The other area of the debt stock we are trying to highlight is to say the debt stock is also growing from the issuance of promissory notes, which are not true borrowing as such by the government. “