The Debt Management Office (DMO) has explained that the country’s debt profile keeps rising because of ‘ways and means’ advances, low revenue and increasing interest rates in the domestic and international market.
Patience Oniha, the director general of DMO on Monday when she appeared before the House of Representatives committee on aids loans and debt management to defend the 2023 budget proposals explains the ways and means to be loan advances taken directly by the Federal Government from the Central Bank of Nigeria at specified interest rate.
She said: “It is not free, you pay interest on it. For clarity, the ways and means advances is under the management of the Office of the Accountant General, but supervised by the Minister of Finance. In 2022, no provision was made for payment of interest on ways and means.
“But if you look at the actual, you will discover that some amount has been incurred on ways and means advances. It is not free. So, we pay interest.”
According to the DMO Boss, by the end of December, debt services will be higher than what was budgeted in 2022, largely because of ways and means advances for which N1.2 trillion was proposed in the 2023 appropriation.
“It is common knowledge that we are low on revenue. It what we do as a country is to make sure it is there in the budget and there is seamless process for it. So, in terms of debt servicing, provisions are made in the budget to service the loan and so far, we have not recorded any default”, she said.
Ahmed Safana, chairman of the Committee, and other members expressed surprise at the astronomical increase in debt profile of the country through borrowing by the government, kicking against continuous borrowing, as members expressed worries of what they said was a huge increase in domestic and external debts from borrowed funds by the federal government.
