Patience Oniha Under Fire Over N121trn Debts Normal, Within Limits Claims

Patience Oniha has come under fire by some economists over claims that N121trn debts is normal and within limits.

NaijaOnPoint Nigeria reports that some economists have criticised the defence by the Debt Management Office (DMO), over N121 trillion Nigerian debt, despite Nigeria spending a large chunk of its revenue in debt servicing.

According to the DMO, Nigeria’s public debt stock rose from N97.35 trillion in December 2023 to N121.67 trillion in March.

The Director-General of DMO, Patience Oniha, on Tuesday, June 25, defended the debt spike despite Nigeria’s usage of over 97 per cent of accrued revenue to service debts.

Oniha argued that if the overall debt is discounted from foreign exchange impact, it is within the normal limits and not overshooting threshold.

Some economists countered DMO’s stance and wondered why the government kept borrowing even for consumption and other recurrent expenditures without maximum impact on economic growth.

A professor of management economics, Emmanuel Abolo, warned the government to stop borrowing, arguing that threatens  Nigeria’s economic sovereignty.

According to the professor, “It is a weak argument to compare our debt standard with international institutions’ rating when we can hardly show what we do with the debt.

“One of the implications is the fiscal strain these excessive debts will put Nigeria into. You look at the servicing costs of these debts which outweigh revenues. It’s already causing a huge budget and fiscal deficit.

He added that the huge debt is going to crowd out public investments in critical areas of the economy. That is going to slow down economic growth and development.

“In terms of currency and development, we can say that the high debt can lead to currency depreciation. The currency is now stabilising around N1,500/$ and that is extremely high, ”

“There’re going to be currency risks because part of the debts is the external debts. When there is exchange rate volatility, you’re going to be exposed to currency and risks,” he added.

A development economist who consults for the British Department for International Development (DFID), Celestine Okeke berates the DMO’s comments and wonders why the government keeps defending the “indefensible”.

“The foreign and external debts keep surging because of exchange differentials which it caused by the way and manner it has managed the subsidy removal incidence and currency depreciations which created huge problems for the economy.

The government needs to come up with clear economic plans so that we can question all the steps and borrowings they make,” he said.

These two, in particular, affect the debt stock and debt service,” she said.

Notably, Oniha, in a further clarification earlier said the increase in Naira Terms of N24.33 trillion between the fourth quarter of 2023, and the first quarter of 2024, did not strictly represent new borrowing.