Expert, MPC Members Worried As Govt Debt Rises By N12trn In One Year

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A finance and economy expert and two members of the Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) have expressed concern over the deteriorating fiscal performance of the Nigerian government.

According to the MPC members, government debt rose from N22.7 trillion at the end of December 2020 to about N35.10 trillion by the end of December 2021, translating to an increase of N12.4 trillion.

The poor revenue growth in a period of expanding government expenditures caused a soar on the budget deficit levels in the first quarter of 2022, similar to the trend witnessed in 2021.

Also, in what looks like a surprising coincidence, the Group Managing Director, Cowry Asset Management Limited, Mr Johnson Chukwu on a different occasion, projected that Nigeria may end 2022 with N12.6 trillion deficit.

Meanwhile, the MPC Members, Adenikinju, Adeola Festus and Asogwa, Robert Chikwendu in their Personal Statements at the 142 MPC Meeting of May 23-24, 2022 released last weekend observed that government deficit position worsened in March 2022 relative to a year earlier, as increase in government expenditure outpaced government revenue.

Available records contained in the latest CBN Money and Credit data for April 2022, showed that credit to the government rose by N2.5 trillion or 17.7 per cent to N16.6 trillion as at April 2022 from N14.1 trillion as of January, 2022.

Also, credit to the government rose steadily in the four-month period, rising from N14.1 trillion in January 2022 to N14.7 trillion in February, and to N16.3 trillion in March before advancing to N16.6 trillion in April 2022.

Advising that it is important to curb the appetite of the government for debt, the MPC members said that the government ranks as number four largest beneficiary of total credit to the economy.”

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