Recently the 2020 Appropriation Act approved a total of about N1.6 trillion as new borrowing to part-finance the deficit in the budget. This was made up of about N745 billion domestic borrowing and N850 billion external borrowing.
“With the COVID-19 Pandemic and its attendant effect on the world economy and the International Capital Market, the federal government reappraised its borrowing plans and decided that it would be more expedient to raise the N850 billion, earlier approved as external borrowing, from domestic sources. This conversion from external to domestic is to ensure that the implementation of the 2020 Appropriation Act is not jeopardised by lack of funds,” DMO disclosed.
The nation’s debt managers, however, explained that the N850 billion is not new or incremental borrowing, but rather an amendment of the source of borrowing from external to domestic. “With this change, the total new domestic borrowing under the 2020 Appropriation becomes N1,594.99 billion which is the same as the total new borrowing in the 2020 Appropriation Act.”
