Nigeria borrowing to pay debts, Finance minister, Oyedele, explains increase in nation’s debt

Minister of finance and coordinating minister of the economy, Taiwo Oyedele, has explained that the sharp increase in Nigeria’s dept profile was mostly due to depreciation of the naira, and not necessarily from fresh borrowings by the Federal Government.

Oyedele made the clarification on Monday while addressing the Senate committee on finance on the state of the nation’s economy.

He also explained that much of the government’s domestic borrowing was used to refinance existing debt rather than accumulate new obligations.

Responding to questions from Adamu Aliero, senator representing Kebbi central, on claims that the current administration had borrowed about N80 trillion in addition to the N75 trillion public debt it inherited, Oyedele explained, that comparing the country’s debt stock at the start of the administration with the current figure without accounting for exchange rate movements created a misleading impression.

“When this administration came into office, public debt was around N75 trillion. Many people simply compare that figure with today’s debt stock and conclude that this government has borrowed massively,” he said.

“However, it is important to note that, following the reforms and the depreciation of the naira, the foreign currency component of our public debt had to be revalued because Nigeria reports its debt in naira.

“That accounting adjustment alone added more than N40 trillion to the public debt figure.”

The minister said the securitisation of the ways and means advances inherited from the previous administration also contributed significantly to the increase in the debt stock.

“Another important factor is the securitisation of the ways and means advances from the previous administration, which the national assembly approved,” he said.

“About N33 trillion…