Auditor-General queries N54.57trn DMO debt gap as agency disp...

The Auditor-General for the Federation has raised questions over N54.57 trillion in debt reportedly contracted by the Debt Management Office (DMO) between 2020 and 2024 beyond the borrowing figures contained in the Federal Government’s approved budgets.

The finding has opened a fresh debate over the transparency of Nigeria’s debt accumulation and the processes used to secure government financing, even as the DMO rejected the basis of the calculation, saying it improperly classified refinancing and other approved transactions as new borrowing.

According to the Auditor-General’s 2024 Annual Report on Non-Compliance and Internal Control Weaknesses, the DMO contracted new domestic and external debt issues totalling N88.67 trillion during the five years, compared with N34.10 trillion in debt financing provided for in approved Appropriation Acts.

The report said the N54.57 trillion difference represented borrowing for which evidence of National Assembly approval was not provided to auditors.

The annual breakdown showed that the DMO issued N8.21 trillion in new debt in 2020 against approved debt financing of N2.95 trillion, leaving a gap of N5.26 trillion.

The discrepancy widened to N4.26 trillion in 2021, when new issues reached N9.66 trillion against N5.40 trillion approved, and N3.91 trillion in 2022, when N10.21 trillion was issued against N6.30 trillion.

The largest variance came in 2023, when reported new issues surged to N39.19 trillion, compared with N10.58 trillion contained in the approved budget, producing a N28.62 trillion difference.

In 2024, the DMO reported new issues of N21.40 trillion against N8.88 trillion approved, leaving another N12.52 trillion gap.

The Auditor-General warned that the weakness could expose the government to the risk of contracting unapproved debt, undermine transparency and weaken public confidence in financial reporting.

The DMO, however, said the N88.67 trillion figure was misleading because it included refinancing of maturing obligations that should not be treated as fresh borrowing.

It cited the refinancing of Nigerian Treasury Bills, FGN bonds, Sukuk and Green Bonds, arguing that replacing maturing obligations does not increase the underlying debt burden in the same way as borrowing to finance new expenditure.

The debt office also said the Auditor-General understated approved borrowing by excluding supplementary appropriations and some other approved facilities.

According to the DMO, total approved borrowing for the five years was actually N40.50 trillion, comprising N4.59 trillion in 2020, N6.20 trillion in 2021, N7.26 trillion in 2022, N13.57 trillion in 2023 and N8.88 trillion in 2024.

It also pointed to the securitisation of Ways and Means Advances, saying the Federal Executive Council and National Assembly approved N22.719 trillion in 2023 and another N47.30 trillion in 2024.

The dispute has significant implications for Nigeria’s fiscal management because the classification of refinancing, supplementary borrowing and fresh debt affects how the country’s borrowing requirements and fiscal risks are measured.

It also comes as the Federal Government relies heavily on domestic debt to finance widening budget deficits, putting pressure on debt-service costs and competing with the private sector for available capital.

The Auditor-General’s findings and the DMO’s rebuttal therefore point to the need for clearer reconciliation of approved borrowing, refinancing operations and other debt transactions so that policymakers, lawmakers and investors can accurately determine how much fresh debt the government is contracting and the cost of servicing it.