A report by Agusto & Co. Limited has estimated that the Federal Government’s local currency debts will rise to N44tn in 2022.This was disclosed in a report, titled ‘Nigeria in 2022’, on the economic outlook for 2022.It said, “Local currency debts of the FGN [Federal Government of Nigeria] will grow to about N44tn or about 9X of its revenues. The median for key countries in sub-Saharan Africa is about 2X.“Because of the high cost of servicing these debts at commercial rates, the Central Bank of Nigeria will continue to accommodate the FGN by lending to them at rates below inflation, thus reducing FGN’s borrowing requirement from the markets and put a downward pressure on interest rates as banks, pension funds, insurance companies and other institutional investors compete for government securities.“The average yield on FGN’s 10-year US$ bonds was 7.1 per cent in 2021 compared to 1.4 per cent for those issued by the government of the USA. This translates to a country risk premium of 5.7 per cent. We believe that this risk premium will be about 5.0 per cent in 2022 as fears about COVID-19 recede and the fact that Nigeria has ample resources to service its FCY debts. However, this premium may spike if there is a flight to safety by investors.”According to the report, federation account revenues should grow by about 15 per cent in 2022.It said the bulk of the growth would come from Value Added Tax and Companies’ Income Tax.It said the Federal Government’s share of these revenues and its independent revenue would be about N5tn under most aggressive estimates.The report said the Federal Government should be able to borrow another N8tn to augment its spending.It said obligatory spending (interest on loans, statutory transfers and payroll & unfunded pensions) would total about N11tn.The bulk of the remaining funds would go to capital expenditure, which it estimated at not more than N3tn.