FG to spend N2trn on debt servicing

The Federal Government will spend N2.11 trillion to service foreign and domestic debts and borrow about N2.6 trillion in new domestic debts over the next four years, according to government’s fiscal plan approved by the National Assembly.

A breakdown of the MTFF obtained by The Nation showed that government would use N1.93 trillion to service domestic debts while another N180 billion would be used to service foreign debts.

The Medium-Term Fiscal Framework (MTFF) 2012 to 2015 outlines government’s incomes and expenditure profiles over the four-year period.

During the course of the fiscal plan, the government plans to borrow N2.59 trillion through the domestic debt market with an average yearly borrowing of N648 billion.

According to the fiscal plan, government plans to gradually reduce amounts for debt servicing from N511.98 billion in 2012 to N543.38 billion in 2013 and subsequently to N446.62 billion and N423.39 billion in 2014 and 2015 respectively.

In the same vein, domestic borrowings are expected to trend downward from N794.4 billion in 2012 to N752.9 billion in 2013 and subsequently to N578.72 billion and N461.75 billion in 2014 and 2015 respectively.

However, the borrowings indicated under the MTFF were significantly above the recommended level under the Debt Sustainability Analysis (DSA), which previewed Nigeria’s growth variables and debt capacity.

The DSA was a multi-party report jointly produced  by the Ministry of Finance, Central Bank of Nigeria (CBN), National Planning Commission, Budget Office of the Federation, National Bureau of Statistics (NBS) and the Debt Management Office (DMO), which served as the coordinating organisation for the report.

The DSA recommended a borrowing limit of some N345 billion or $2.25 billion for 2012 including N208 billion local borrowings and $0.90 billion external debts.

It emphasised that borrowings by government should be applied to specific national priority projects, which can create jobs and generate sufficient stream of incomes to service the borrowed funds.

Via The Nation

2 Comments

1. 

   Anonymous

   January 30, 2012 at 3:09 pm

   MADAM , SEEMS THEY HAVE FINALLY LURED YOU INTO THERE BUSINESS.
2. 

   Oseun

   January 31, 2012 at 3:16 pm

   @Change_0007:disqus  I wonder what u meant by madam have joined them. Don”t you want Nigeria to pay back the debt owed?