The Debt Management Office (DMO) has issued a warning to the Federal Government (FG) against additional borrowing, citing that 73.5% of this year’s revenue will be used to service debt. According to the DMO, this high Debt Service-to-Revenue ratio is unsustainable and poses a threat to debt sustainability.
The DMO recommended that the FG focus on increasing revenue generation to achieve a sustainable Debt Service-to-Revenue ratio.
It suggested raising the projected FGN revenue from N10.49 trillion to about N15.5 trillion.
These recommendations were made after analyzing the nation’s debt profile in 2022.
DMO’s analysis revealed that the Total Public Debt-to-GDP ratio is projected to increase to 37.1% in 2023, mainly due to new borrowings, FGN Ways and Means at the CBN, and estimated Promissory Notes issuance.
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