Buhari piles up more debt via restructuring

Sopuruchi Onwuka

The outgoing government of President Muhammadu Buhari is working to have more access to cash in the immediate term, pushing forward the obligation of debt servicing to the incoming administrations.

In an interview she granted agency sources on the country’s surging debts, the Minister of Finance, Zainab Ahmed, said government of the day is working on debt restructuring in order to push forward repayment obligations and enjoy temporary relief from rising debt-service burden.

The agency reports also hold that the Buhari government has already appointed a consultant for the larger portfolio of debt to assess how the government can get additional relief to extend the repayments.

The Oracle Today reports that such a move would ultimately push the consequences of the economic mess of the present administration of the federal government to the next administration and offer the outgoing administration the opportunity of cash liquidity in the immediate term.

The government of President Muhammadu Buhari is expected to hand over to a newly elected government by May 2023 after eight years of disastrous economic mishaps that have seen piles of local and foreign debts, rising poverty, galloping inflation and acute foreign exchange crunch.

Currently, debt servicing is taking over 50 percent of government’s revenue and annual budgets inevitable have huge provisions for significant payments for debt servicing.

Ahmed stated that government plans to refinance domestic debt obligations that are due this year and the next, and that N20 trillion or $46.05 billion in outstanding borrowings from the Central Bank of Nigeria (CBN) would be bundled into government bonds.

The country’s dollar-denominated bonds fell across the curve on Wednesday, with longer-dated issues down as much as 1.8 cents to trade at 56.8 cents in the dollar, Tradeweb data showed.

Nigeria’s international bonds maturing in ten years or beyond are trading at less than 70 cents, the threshold below which debt is considered as distressed.