This was as the Appropriation Committee rejected revenue projection for Government Owned Enterprises (GOEs) and other revenue generating agencies as contribution to fund the 2024 budget.
Also, the Minister of Budget and Economic Planning, Atiku Bagudu, told the committee that President Bola Ahmed Tinubu has directed all ministers to begin to think out of the box on how to increase government revenue.
Speaking when she appeared before the committee, Director General of the DMO, Patience Oniha, said while borrowing to fund critical projects is not bad, increase in revenue generation will reduce government borrowing.
She disclosed that as at June 2023, total government debt stood at N87.37 trillion spread across the three tiers of government and the FCT, with the Federal Government accounting for 90 percent of the debt.
She disclosed that the debt increased because they added the Ways and Means advances to the existing debt.
She said that as borrowing increases, debt servicing will also increase.
Oniha said the DMO was expected to raise about N8.8 trillion from both local and foreign sources to fund the 2023 budget.
She said it has been able to raise N7 trillion from local sources.
She said the country has been running a deficit budget for several years with the DMO required to raise funds locally and internationally to support the budget.
“We run budget deficits because we have projects and programmes in the budget that the government wants to run.
“We usually publish the debt data every quarter. So the most recent data we have in terms of debt stock is as at June 30th of 2023. The figure for public debt is N87.37 trillion. That is made of of external and domestic debt and it is for the federal government and the 36 states and FCT.
“Out of the 87 trillion, about 90 percent belongs to the federal government, I believe, because of the role the federal government plays we account for the largest share. blBut we report everything because that is best practice.
“If you compare that figure to last year December it was 46 trillion naira. So it has grown sharply because we have borrowed and but also because we added the ways and means advances to that number. It is public. It was approved.
“Debt has been growing largely from new borrowings. You see the MTEF for instance that you have approved, it has borrowings in each of the year of 8.7, 10.2 and 11.58 trillion naira just to buttress the point that as you increase the funds the debt stock grows.
“So it is also growing because we have issued promissory notes and again like I said ways and means advances. We usually like to say that debt stock relative to our GDP is not the issue. That has grown from 23 percent in March to about 40 percent in June. The same way the debt stock grew.But we need to do, to focus on is debt service revenue which is very high.
“So apart from trying to generate as much revenue as we should, what else should we be doing? We are advocates for a number of initiatives being taken. Agencies should be privatized if those projects can be better managed. You can attract capital. Do the private public partnership so that it is not everything is on the budget.
‘We should strongly support the Fiscal Reform and Tax Policy Committee, we really need to get that working to change the story of us.
“For this year 2023 the DMO was to provide about 8.8 trillion naira. 7 trillion of that is domestic meaning we borrow it here on naira. And then there is 1.7 trillion that ordinarily in normal times we would have issued euro bonds or from other sources.
“We have been extremely supportive of funding the budget and the operations of government. The other way we try to support Infrastructure is directly with the sukuk. So this year some of that 7 triliion we issued it by way of sukuk and you will soon begin to see the roads across the FCT.”
In his own presentation, the Minister of Budget and Economic Planning said the President has given a marching order to Ministers to ensure that funds are raised to fund the annual budget by thinking outside the box.
He said with the support of the Parliament, the government hopes to generate more revenue and fund the country’s dreams.