How Nigeria Can Sustain Its Debt Challenges And Mobilise Revenue

By Tolulope Oke

According to the Debt Management Office (DMO), Nigeria may lessen its reliance on borrowing to pay budget shortfalls by prioritizing spending and enhancing its revenue drive.

Patience Oniha, the director general of the DMO, stated this on Tuesday in Abuja during a presentation at the Fiscal Responsibility Commission’s Executive Course on Budgeting and Fiscal Responsibility, News Agency of Nigeria (NAN) reports.

She stated that due to decades of fiscal deficits, borrowing from both domestic and foreign sources was essential.

“A budget may be surplus, balanced or deficit. Nigeria has run deficit budgets on a consecutive basis for decades.

“The financing of the deficits through borrowing from local and external sources is the principal reason for the growth in debt stock and debt servicing.

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“One way to reduce budget deficits is to grow revenues; the other way is to prioritise expenditure and cut waste and leakages,” she said.

However, she said that in addition to the federal government, sub-national governments also contributed to the nation’s total debt stock.

She claimed that despite minimal revenue, the government was still able to fulfill its obligations to build infrastructure and fulfill other duties by borrowing money.

Moreso, she stressed that borrowing is not peculiar to Nigeria as countries across the world are borrowing.

“Debt levels are rising everywhere. Global revenue dropped as a result of Covid-19, and the Russian-Ukraine conflict has also increased borrowings.

“Our problem is debt service to revenue ratio,” she said.