DMO raises alarm as Nigeria's 'category B' economic rating shuts out investors

The Director-General of the DMO, Patience Oniha, revealed this when she appeared before the House of Representatives Committee on Aids, Loans and Debt Management to defend the agency’s 2023 budget.

According to Oniha, it was very necessary for Nigeria to improve on its revenue drive as sourcing for alternative funding was proving to be difficult while also adding that the country would not survive in its present state.

Oniha noted that currently, the Federal Government had failed to meet its external borrowing target and due to this development, the FG had now turned its sights to lenders in the United States and Europe.

Despite higher crude prices which have obviously failed to turn things around for the country, the recent downgrade by Fitch was caused by the continuous worsening state of government debt service costs and external liquidity.

Documents from the DMO showed that as of June 2022, Nigeria's total total-public-debt stood at $103.3 billion. Oniha lamented that the current debt situation would have been ameliorated if Nigeria had taken advantage of the hike in recent crude oil prices.

“If all we did was produce our quota of crude oil, we would be in a surplus— oil price doubled the budgeted price,” Ms Oniha said.

Several factors like oil theft and vandalization of pipelines have been a major challenge which has made the country unable to meet OPEC’s oil production quota of 1.830 million barrels per day.

Nigeria is now rated on the same level with Ecuador and Angola on the Fitch rating and also rated one level lower at B-, and six notches above default.

The DMO boss further noted that normally, the FG would have issued Eurobonds to raise the money but there had been a setback for the country as the international capital markets and foreign lenders had shut off their operations to countries like Nigeria from the fourth quarter of last year.