The Federal Government has been warned by the Debt Management Office (DMO) against additional borrowing

The DMO which noted that 73.5 per cent of revenue generated this year will be used to service debt, added that the Debt Service to Revenue ratio for 2023 is high and cannot support higher levels of borrowing. It is also said to be a threat to debt sustainability.

The FG has been asked to focus on increasing revenue generation as a sustainable Debt Service-to-Revenue ratio will require increasing FGN revenue from N10.49 trillion projected in 2023 budget to about N15.5 trillion.

The DMO in the report of the Annual National Market Access Country (MAC) Debt Sustainability Analysis said;

“The analysis of the results of 2022 MAC-DSA shows that the Total Public Debt-toGDP ratio is projected to increase to 37.1 per cent in 2023, relative to 23.4 per cent as at September 2022, due to the inclusion of the N8.80 trillion (new borrowings) for the year 2023, the FGN Ways and Means at the CBN of over N23 trillion and estimated Promissory Notes issuance of N2.87 trillion in the debt stock.

“Baseline Scenario: The Country’s Debt stock remains sustainable under these criteria, but the borrowing space has been reduced when compared to Nigeria’s self-imposed debt limit of 40 per cent set in the MTDS, 2020-2023.

“On the other hand, FGN Debt Service-to-Revenue ratio at 73.5 per cent 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 Nigeria’s self-imposed debt limit of 40 per cent, while the FGN Debt Service-to-Revenue also exceeds the recommended threshold of 50 per cent.”