Patience Oniha, who is the Director General of the Debt Management Office (DMO), has said that one of the causes for the present debt crisis that Nigeria is experiencing is due to the fact that the nation is unable to reach the daily production quota that it has agreed to with OPEC.
This information was provided by Ms. Oniha during her testimony on Monday in Abuja before the House of Representatives Committee on Aids, Loans, and Debt Management.
Ahmed Safana, who was serving as chairman of the committee at the time, said that he was taken aback by the nation's steadily rising debt profile.
He inquired with the DMO as to the reasons for the significant rise in both domestic and international indebtedness.
Mr. Safana said that there was a rise of N1 trillion in the nation's debt profile during the course of the previous year.
According to information provided by the DMO, the total amount of public debt owed by the federation as of June 2022 was $103.3 billion.
Ms. Oniha said in response that if Nigeria had capitalized on the recent increase in the price of crude oil, the country would not be in the precarious financial position that it is in now.
According to what Ms. Oniha had to say, "If all we did was produce our quota of crude oil, we would be in a surplus— the price of oil twice the amount that was budgeted."
In spite of the fact that OPEC agreed to a quota for Nigeria of 1.830 million barrels per day, Nigeria has frequently failed to satisfy the requirements of the quota because of oil theft and vandalism of pipelines.
The Director General was not happy that the government was unable to increase income while at the same time committing to large spending.
She noted that in order to manage the rapidly growing debt profile, the nation has to look at both its income and its expenditures.
"It is also possibly feasible to start looking at the expense, and if you cannot afford it or can only afford it by taking out a significant loan, you may have to rethink. If this is the case, it is also conceivable to start looking at it. She said, "I agree with you (lawmakers) that the size of our budget is quite tiny in comparison to our GDP."
Ms. Oniha further advised the parliamentarians that there is no possibility of obtaining a Eurobond owing to the global uncertainty caused by the conflict between Russia and Ukraine.
According to him, the majority of creditors are concentrating their efforts on the United States and other AA ratings markets.
She indicated that the amount of risk that those investors are willing to accept is capped at a certain level.
"We don't know when the globe will recover before you could go to Eurobonds and raise financing. Already, there is discussion of a recession in the UK, and we do not know who else is talking about it. She said, "I think it is smart for us, as a country, to hunt for money outside the DMO. I believe it is important for us to do so."
She went on to say that only Nigeria and Egypt have lately issued Eurobonds on the African continent, and that no other government on the continent had been successful in raising money via the sale of Eurobonds.
In the meeting of the National Assembly that took place one month ago, President Muhammadu Buhari proposed a budget for the year 2023 with a total amount of N20.51 trillion. The budget that has been submitted has a shortfall of N10.78 trillion.