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Nigeria used borrowings as tool for economic recovery – DMO

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Ekiti, Rivers, Bauchi, 9 others raise foreign debts of states by $131m in 6 months

The Debt Management Office (DMO) said on Thursday the Federal Government used loans secured from multilateral lenders as a tool for economic recovery.

The Director-General of the DMO, Patience Oniha, stated this in a keynote address at the fourth national budget roundtable and panel discussion at Covenant University, Ogun State.

She said Nigeria’s current debt profile to Gross Domestic Product (GDP) ratio was 22 percent, lower than the 40 percent stipulated for developing countries by the World Bank and International Monetary Fund (IMF).

She stressed that the critical infrastructures built by the Federal Government were funded with internal and external borrowings.

READ ALSO: DMO completes first round of 2022 borrowing plans

Borrowing, according to her, was not condemnable, especially when it is pumped into developmental projects and programmes.

The DMO chief listed some of the projects undertaken by the Federal Government to include the Lagos and Enugu airports, the Lagos-Ibadan expressway, and the Second Niger Bridge, among others.

Oniha said: “Government borrowing can also support other sectors of the economy that attract foreign investors and have multiplier effects on the country.

“The nation’s debt profile is fast growing as the country has a huge infrastructure deficit.

“However, the government is working tirelessly to diversify revenue sources to reduce pressure on crude oil, which is prone to volatility.

“The Nigerian government has successfully utilised borrowing as a tool for economic recovery, to bring the economy out of cycles of recessions, first in 2017 and second in 2021.”

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