Nigeria’s Local, Foreign Debt Rises From N21.7tn To N24.3tn

A file photo of Mrs Patience Oniha

 

Nigeria’s total debt profile now stands at N24.3 trillion as of December 2018, the Debt Management Office has said.

The Director-General of the DMO, Mrs Patience Oniha, disclosed this at a press conference in Abuja on Thursday.

She explained that the figure rose by 24 .3 per cent from N21.7 trillion in 2017.

“The debt stock did increase by 12.25 per cent in naira terms. As of December 31 2017, it was at N21.725 trillion; by December 31 2018, it was N24.387 trillion,” the DMO boss said

READ ALSO: Report Any Station Selling Petrol Above N145, NNPC Tells Nigerians

She added, “The figure here is total public debt. So, it includes the FG, 36 state governments, and FCT, and it includes both foreign and domestic.”

Oniha said the Federal Government’s domestic debt stock include N331.12 billion promissory notes issued to oil marketing companies and state governments in December 2018.

Nigeria To Auction 430bn Naira Bonds In Q1

Nigeia's naira bondThe Nigerian government plans to auction between 430 billion Naira in local currency bonds, in the first quarter of 2017.

According to the nation’s debt issuance calendar, the 2027 bond will be a new issue in march.

The Debt Management Office (DMO) is expected to auction between 110 billion Naira, and 140 billion Naira worth of bonds maturing in 2021, and about 105 billion Naira of the bond maturing in 2026.

The DMO will sell 55 billion Naira of the March 2027 bond, while 130 billion Naira of the 2036 bond will be offered.

Nigeria has proposed a budget deficit of 2.36 trillion Naira for year 2017.

Meanwhile, the government hopes to fund the 2.36 trillion Naira budget deficit, by borrowing 1.254 trillion Naira domestically and 1.067 trillion Naira from outside Nigeria.

Buhari Asks States To Pay Workers From Debt-Service Refunds

Muhammadu Buhari, Owed Debt, StatesPresident Muhammadu Buhari has requested state governors to pay at least 25% of the refunds made to them from excess deductions for external debt service, to be used to settle outstanding workers’ entitlements.

The President made the call as he approved the sum of 552.74 billion naira to be paid in batches to all the states that are owed.

However, the states are expected to receive 25% of their approved sums in the first instance before the week runs out. There are about 33 states in the bracket.

A statement by his spokesman, Mr Garba Shehu, revealed that the refunds arose following the claims by the states that they had been overcharged in deductions for external debt service between 1995 and 2002.

In a directive through the Minister of Finance, Kemi Adeosun, President Buhari said that the issue of workers’ benefits, particularly salary and pensions must not be allowed to continue as a national problem and should be tackled with all the urgency that can be summoned.

When he assumed office in 2015, the President declared an emergency over unpaid salaries after he discovered that 27 out of Nigeria’s 36 states had fallen behind in payments to their workers, in some cases for up to a year.

Following this, a bailout loan was issued to the states twice with a first batch of about 300 billion naira given to them in 2015 in the form of soft loans.

The administration also got the Debt Management Office (DMO) to restructure their commercial loans of over 660 billion naira and extend the life span of the loans.

Because this did not succeed in pulling many of the states out of distress, the Federal Government consequently gave out an additional 90 billion naira to 22 states in 2016, as yet another bailout loans under very stringent conditions.

President Buhari has expressed the opinion all the time that the payment of salaries and pensions must be given priority to save both serving and retired workers and their families from distress.

DMO Sets 2017 Debt Limit For FG

Debt Management Office - DMO Sets 2017 Debt Limit For FGThe Debt Management Office has fixed the maximum limit for the federal government’s domestic and external borrowing at 22.08 billion dollars for the 2017 fiscal year.

This is part of policy recommendations of the Debt Management Office contained in its 2016 report of the annual national debt sustainability analysis.

According to the management office, new domestic borrowing has been pegged at 5.52 billion dollars, while new external borrowing is put at 16.56 billion for 2017.

The report explains that, the present value of ‘total public debt to GDP’ ratio for 2016 for the federal government is projected at 13.5 percent with an available borrowing space of 5.89 percent of the estimated GDP of 374.95 billion dollars for 2017.

The management office also recommends that government should explore other alternative and viable sources of financing for the country’s huge infrastructure requirements.

World Bank’s Loans To Nigeria Hit $6.29Bn

World BankThe Debt Management Office says loans accrued by Nigeria from the World Bank has risen to 6.29 billion dollars.

Latest debt figures from the DMO show the World Bank’s total commitment to the country stood at 6.29 billion dollars as at December 31, 2015, as against 3.94 billion dollars as the end of 2011.

This means that within a period of four years, the bank’s portfolio in the country grew by 2.35 billion dollars, representing an increase of 59.64% within the period.

With this development, the World Bank group is Nigeria’s highest external creditor with 58.72% of the nation’s total external debt profile.

Finance Minister Launches Cost Cutting Programme

financeThe Minister of Finance in Nigeria, Mrs Kemi Adeosun, has inaugurated a government spending control team called ‘The Efficiency Unit’ (E-Unit).

Mrs Adeosun on Monday launched the programme to monitor and cut recurrent expenditure across Federal government ministries.

She said the Director at the Debt Management Office, Mrs Patricia Oniha, would be the leader of the unit.

The Efficiency Unit will also assist the government in identifying opportunities to reduce wasteful spending by public office holders, she said.

Best Possible Value For Money

According to the Finance Minister, “there is no amount of fiscal innovation and re-engineering that would deliver the desired results, if the way government funds are spent is left unchecked”.

She also directed the E-Unit team to concentrate on the daily recurrent expenditure of government, which she said had been dubiously inflated over the years.

President Muhammadu Buhari on November 25  approved the establishment of the E-Unit in the Federal Ministry of Finance.

According to the President, the principal objective of the Efficiency Unit is to ensure that all government expenditure are necessary and represent the best possible value for money.

Presently, the oil-rich nation’s recurrent expenditure completely dwarfs capital expenditure by a ratio of 84/16.

This includes non-wage related overhead expenditure such as travel costs, entertainment, events, printing, IT consumables and stationeries among others.

As at September 2015, the entire capital expenditure was just 194 billion Naira while overhead expenditure was 272 billion Naira.

Agency Puts Nigeria’s External Debt At $11bn

Abraham nwankwo.The Debt Management Office (DMO) in Nigeria, says the nation’s external debt profile now stands at $11 billion with the domestic debt hitting 11 Trillion Naira (about $55.2 billion).

Giving a speech at a workshop held in Kaduna on Friday, the Director General of the DMO, Dr. Abraham Nwankwo, explained that despite the nation’s huge debts, the economy had remained resilient and diversifiable.

The enlightenment workshop on “Understanding Public Debt Management” was organised for Student Unions in Kaduna State, North West Nigeria.

Dr. Nwankwo explained that the states accounted for 18 per cent of the domestic debts while the Federal Government accounted for 82 per cent.

‘Gross Misuse Of Borrowed Funds’

He called on all tiers of government to utilise public funds for the good and development of the people, expressing worry that the ‘gross misuse of borrowed public funds’ by Public Officers contributes to the rising debt profile.

Dr. Nwankwo also stressed that the way to achieve good governance in Nigeria was for public office holders to run a transparent fiscal management.

“Government should draw on the positive side of borrowing,” he said, stressing that some developed nations depend heavily on borrowing to sustain their economies.

He specifically emphasised the need for the youths, as leaders of tomorrow, to develop the attitude and understanding of fiscal responsibility in order to hold their leaders accountable.

While encouraging state governments to source funds for developmental purposes, the DMO boss pointed out that the cynicism that usually trail decisions to borrow was due to the unpleasant cases where governments borrow money and misappropriate it.

He said that the misappropriation of borrowed funds had resulted in unsustainable debt portfolio.

The DMO boss, however, noted that under the President Muhammad Buhari’s administration, ‘the economy is becoming more robust’ and urged Nigerians to cooperate with the administration in order to achieve the desired change.

There has been consistent controversy over debt management in Nigeria.

The controversy includes primary objections to and justifications for borrowing.

Most of the objections focus on the interest cost that is created, the inflationary pressures that are associated with large-scale borrowing, debt illusion, crowding out effect and generational inequity of debt burden.

Today, the cry and protest over debt management are over non-sustainability of public debt, borrowing without due process, continued borrowing on non-concessionary terms and the use of loan proceeds for purposes other than those for which they were obtained.

It is for this reason that the Debt Management Office assembled students drawn from various higher institutions across Nigeria to sensitise them on how to monitor how such borrowed funds are spent.

Making their contribution, a representative of the students union, Salahudeen Lukman, advised both the State and Federal Government to ensure that all funds borrowed for development of the education and other critical sectors of the economy were judiciously utilised in order to ensure growth and development.

Tax Evasion Hampering Increase In Nigeria’s GDP – Agency

Debt Management stakeholders retreat in OsunThe Debt Management Office in Nigeria has identified Tax Evasion as the major factor militating against increase in the Nation’s Gross Domestic Product (GDP).

At a retreat of stakeholders held in Ada in Osun State on Saturday on the implications of rebasing of Gross Domestic Product for Public Debt Management, speakers observed that Nigeria’s debt/GDP Ratio had, after rebasing, dropped from 22.84 per cent to 12.65 percent indicating that the economy has grown appreciably.

The three day Retreat was organised by the Debt Management Office for members of the House Committee on Aids, Loans and Debt Management.

They gathered to deliberate on the importance of rebasing, its benefits and effects on Nigeria’s Gross Domestic Product for a better Economy.

Stakeholders observed that although the rebased GDP indicated broader classifications and economic activities, there was still the need for continued diversification of the economy away from Oil and Gas as its major Source of Revenue.

Proper Tax Administration and Collection, they all agreed, was one major way of increasing Nigeria’s GDP.

Director General, Debt Management Office, Abraham Nwankwo, stressed that focus should be on having the revenue to service debts, insisting that even though Nigeria’s debts ratio had fallen, “it does not mean that Nigeria is in a position to borrow money”.

Other Participants at the retreat stressed that as much as the government had a part to play in enhancing the economy; individuals had the major responsibility to perform their civic duty.

With this message it is hoped that every Nigerian will see the future of the Nation as a collective responsibility so the revenue profile of the government can grow in commensurate with the growing economic activities.

Lawmakers, Experts suggest Real Sector Development To Manage Debt

Abraham nwankwo.Nigerian Lawmakers and experts with the Debt Management Office (DMO) have prescribed the development of the real sector as a major solution to the challenge of keeping the nation’s debt within sustainable level.

At a retreat organised to enable the members of parliament and the DMO to rub minds on how to manage Nigeria’s debt situation to fit into the government’s economic transformation agenda, Nigeria’s debt profile was considered, with view to finding a reliable way of cutting it down.

Making a presentation at the 3-day retreat held at the Miccom Golf Hotel, Abuja on Saturday, the DMO Director General, Dr. Abraham Nwankwo, said that lesser government borrowings and creation of opportunities for the private sector to raise long term capital for the development of the real sector and infrastructure would reduce poverty in the nation.

Dr. Nwankwo told members of the House of Representatives Committee on Aids, Loans and Debt Management that Nigeria’s public debt profile as at September 2013 was $8.264 million which he said was 22% of the total GDP just as the Domestic debt profile as at September 2013 was also 7.032 trillion Naira.

However, he maintained that the level of the debt was still sustainable.

All the speakers emphasised the involvement and cooperation of Nigeria’s corporate businesses, as the sector could guarantee sustainability of the nation’s debt by leveraging on the existing sovereign benchmark to raise long term capital in the domestic market for the development of the real sector.

It is expected that the ideas that have been exchanged by the parliamentarians lead by Honourable Adeyinka Ajayi and the DMO, on the importance of debt management to the economic wellbeing of the nation, would help in solving Nigeria’s debt challenges.

 

Lawmakers Seek Brief On Nigeria’s Account Status

The Nigerian House of Representatives has mandated a joint committee to look into the government’s accounts to determine its true status.

The mandate also requires the joint committee on Finance, Appropriation, Loans and Aids to look into the economic situation of Nigeria.

A member of the House of Representatives, Bimbo Daramola moved the motion on Thursday.

“There is need for full disclosure of the state of the Federation Accounts and Economic situation of our country,” the lawmaker said.

The committee will meet with the Minister of Finance, Heads of Revenue Agencies, Debt Management Office and related organisations and have them present to Nigerians the full status of the Federation accounts and the current economic situation.

Capital Oil Advises Access Bank To Cease Media War

Capital Oil & Gas Industries Limited has described recent media statement credited to Access Bank PLC, over disputed loan facilities, as a breach of the terms of settlement signed by the two parties on February 9, 2013.

Capital Oil in a statement issued on Friday expressed displeasure that Access Bank is still conveying erroneous impression to the public by stating that its legal disputes with the bank and Coscharis Motors Limited are on-going.

It will be recalled that a Federal High Court sitting in Lagos on February 18, 2013, voided and set aside an interim report by the police dated November 2, 2012 and the Presidential Committee report which purportedly indicted Capital Oil & Gas Industries Limited/Ifeanyi Ubah and Staff of oil subsidy fraud.

The court also awarded N10million damages in favour of Capital Oil & Gas Industries Limited and Ifeanyi Uba.

In a statement released on Tuesday by the Access Bank’s Secretary/Legal Compliance, Sunday Ekwochi, the bank had claimed that its on-going effort to recover debts allegedly owed it by businessman, Ifeanyi Ubah and his company, Capital Oil and Gas Limited would not be hampered by the judgment.

Wondering what the bank is trying to achieve by provoking an unnecessary media war, Capital Oil expressed the hope that the action is not an indication that Access Bank intends to back out of the terms of the settlement agreement.

The oil company also stated that the Special Fraud Unit of the Nigeria Police Force has cleared its chairman, Ifeanyi Ubah and the company of the indictment by the Presidential Committee on the Verification and Reconciliation of Fuel Subsidy Payments (PC) chaired by Aigboje Aig-Imoukhuede, the Managing Director of Access Bank.

According to the statement, the clearance by the Police was contained in a letter dated February 12, 2013 written to the Minister of Finance, the Inspector General of Police, Ministry of Petroleum Resources, Debt Management Office and PPPRA.