FG’s local currency debts to hit N44tn in 2022-Report
A report by Agusto & Co. Limited has estimated that the Federal Government’s local currency debts will rise to N44tn in 2022.
In a report, titled ‘Nigeria in 2022’, the economic outlook for 2022, Nigeria’s local currency debts will grow to about N44tn or about nine times of its revenue
The rise would be triggered by the high cost of servicing these debts at commercial rates, which would make the Central Bank of Nigeria to continue accommodating the Federal Government of Nigeria by lending to them at rates below inflation, thus reducing FGN’s borrowing requirement from the markets and put a downward pressure on interest rates as banks, pension funds, insurance companies and other institutional investors compete for government securities.
The report shows that the average yield on FGN’s 10-year US$ bonds was 7.1 per cent.
According to the report, federation account revenues should grow by about 15 per cent in 2022, as the bulk of the growth would come from Value Added Tax and Companies’ Income Tax.
It said the Federal Government’s share of these revenues and its independent revenue would be about N5tn under most aggressive estimates and should therefore be able to borrow another N8tn to augment its spending.
