Lawmakers lament as Nigeria’s debt reaches an all-time high of N42.84 trillion

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At the resumption of plenary yesterday, the House of Representatives joined the growing number of Nigerians who have expressed concern that the country may be approaching a debt trap, as the Debt Management Office (DMO) revealed that Nigeria’s total debt as of June this year stood at N42.84 trillion.

The House also lamented the drop in crude oil production caused by theft and sabotage. The concerns were raised by House Speaker Femi Gbajabiamila in his welcome remarks following the lengthy recess.

Similarly, while welcoming his colleagues back from their two-month annual vacation, Senate President Ahmad Lawan raised the alarm about massive crude oil theft in the oil-rich Niger Delta. According to Lawan, the problem was gradually putting the economy into a coma.

The senate president pledged necessary support for the Independent National Electoral Commission (INEC) in its effort to deliver a successful poll next year.

The legislative proclamations came on the same day President Muhammadu Buhari, in separate letters, requested the Senate and House of Representatives to approve the issuance of promissory notes totalling over N402 billion for the defrayal of some federal debts.

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A breakdown of the debt figures released by the DMO yesterday showed that the bulk of the federal government borrowings were done domestically, with 72.53 per cent being FGN bonds.

A statement posted on the DMO’s website revealed that Nigeria’s total public debt stock, comprising the debt obligations of the federal, state governments, and the Federal Capital Territory (FCT) rose by N1.24 trillion within three months, from N41.60 trillion ($100.07 billion) as at March 30, 2022 to N42.84 trillion ($103.31billion) by June 30, 2022.
Latest data released by the DMO also indicated that domestic debt stock for the review period stood at N26.23 trillion ($63.24 billion) due to new borrowings by the federal government to part-finance the deficit in the 2022 Appropriation (Repeal and Enactment) Act, including fresh borrowings by state governments and the FCT.

From the N26.23 domestic debt stock standing during the reference period, the 36 states and FCT owed N5.281 trillion, while the federal government accounted for the balance of N20.949 trillion.

The DMO explained that total public Debt to GDP as of June 30, 2022, was 23.06 per cent, compared to 23.27 per cent as of March 30, 2022, noting that the Debt Service-to-Revenue Ratio remained high.

It said, “The total public debt stock, representing the domestic and external debt stocks of the Federal Government of Nigeria, the 36 state governments, and the Federal Capital Territory, was N42.84tn ($103.31 billion) as of June 30, 2022. The comparative figures for March 30, 2022 was N41.60tn ($100.07 billion).”

DMO stressed that external debt remained the same at N16.61trillion ($40.06 billion) from the first quarter (Q1) to the second quarter (Q2) 2022, adding that 58 per cent of external debts are concessional and semi-concessional loans from multilateral lenders, such as the World Bank, the International Monetary Fund (IMF), AfreximBank, and African Development Bank (AfDB), and bilateral lenders, such Germany, China, Japan, India, and France.

Meanwhile, an analysis of the DMO figures showed that domestic debt service between April 30 and June 30, 2022 gulped N664, 728,501,948.46. This was, however, less than the N668, 685, 710,112.98 committed to debt service in the first three months of 2022 (Q1).

Debt service instruments on which the amount was expended included Nigeria Treasury Bills (NTBs), Federal Government Bonds, and FGN Savings Bonds, among others.

The new DMO debt data also revealed that Lagos State retained its top spot as the state with the highest debt stock. As at June 30, 2022, the total domestic debt stock of the country’s economic nerve-centre stood at N797, 305,312,602.53.

Delta State came second with N378, 878,236,830.75, followed by Ogun State with N241, 782,021,304.96; Rivers State, N225, 505,011,356.83; and Imo State, N210, 394,836,519.93.

Akwa Ibom was next on the debtors’ scale with N203, 951,611,822.07, while Jigawa retained its least-indebted state profile with 45,135,377,621.30, and Ebonyi State trailed with N59, 111,939,636.77.

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Lawmakers Lament Rising Debt, Crude Oil Theft, Seek Solutions

The House of Representatives, at resumption of plenary yesterday, expressed concerns over the rising debt profile of the country and crude oil theft. House Speaker Femi Gbajabiamila raised the fears while delivering his welcome remarks.
Gbajabiamila stated that the concerns emerged from interactive sessions of the Senate and House Committees on Finance with the Ministries, Departments and Agencies (MDAs) of the government on the Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP). He said the issues emerged while considering the scope of deficit financing to be proposed in the new budget and the decline in crude oil production due to theft and sabotage.

Gbajabiamila said while the House appreciated that the current fiscal conditions necessitated borrowing to finance budgetary expenditures, there should be worry about the long-term effect of the debt burden on the country and the ability to pay in a responsible and sustainable way.

The concerns, he said, would be central to the consideration of the 2023 Appropriation Bill when presented, adding that appropriations for new projects for MDAs would be influenced by the extent to which existing projects have been funded and their performance in executing these projects as intended.

On crude oil theft, the speaker said perpetrators of the brazen heist threatened the ability to serve the Nigerian people and meet the demands of governance and nation building. He described their actions as treason against the country, for which they must be held accountable.

Gbajabiamila stated, “Due to theft and various acts of economic sabotage, we are experiencing a massive decline in the volume of crude oil exports. Our crude oil export of 972,394 bpd for August is the lowest we have recorded in the last two decades.

“At a time when we are already experiencing severe financial constraints. There are mechanisms in place to prevent these sorts of bad actors, and the government spends significant amounts of money each year to protect oil and gas resources in the country
“Evidently, these existing arrangements do not suffice. As such, there is an urgent need to review them and make the necessary improvements. It is also of particular importance that the perpetrators of these crimes against the state are identified, prosecuted and subjected to the stiffest penalties the law allows.

“Those who seek to impoverish our country in this manner have declared war against the Nigerian people.

“The government’s response must be sufficient to convince them of the error of their ways and deter others who might be tempted to join in their treason.

“I met with the finance minister and the Director General of Budget and made it clear to them that enough of crude oil theft. Nigerians don’t want to hear that again. What do you intend to do about it? That’s the important question.”

Speaking on the lingering strike by the Academic Staff Union of Universities (ASUU), Gbajabiamila said the current framework of government-sponsored tertiary education was no longer working. He said the goal of the House was to begin an assessment of the current system and consider all available options for complete reform.

The speaker claimed that the country recently recorded significant victories against the purveyors of violence and conflict across the country. He said the explosive growth in the trade and consumption of narcotics contributed to the worsening insecurity in the country,

He warned that the country could not afford to be overrun by the cancer of the drug trade and the devastation it brought.

Gbajabiamila lamented that various priority bills were still pending at different stages, despite the limited time available for the ninth House.

Crude Oil Theft Driving Economy into Coma, Lawan Laments

Senate President Ahmad Lawan, yesterday, raised the alarm about the rate of crude oil theft in the Niger Delta, saying it is pushing the economy into a coma. Lawan stated this at the senate plenary while welcoming his colleagues back from their two-month annual recess.

The senate president stressed the need for improvement in the country’s revenue earnings. He warned that unless prompt action was taken to stop crude oil theft, the development might stagnate the economy.

Lawan said, “The economy of our country is still challenged. The Senate, working with the House of Representatives and the executive, needs to continually seek for better responses to the economic situation.

“Generation and collection of revenues have remained major challenges. Also, the massive loss of revenue through oil theft is debilitating and threatening to throw the economy into a coma.

“Revelations about the scale of oil theft shows that until government takes decisive actions, Nigeria could soon lose any revenue from that sector.

“We must, therefore, work to ensure that everything is done to curtail this theft.”

Lawan recalled that the senate had during the recess showed serious concerns about the security situation in the country. He said the red chamber had two engagements with the National Security Adviser, Chief of Defence Staff, service chiefs, Inspector General of Police, Director General of Department of State Services, Director General of Nigerian Intelligence Agency, and other heads of security agencies.

“From the assessment of the prevailing situation, our security agencies are recording more successes and the situation seems to be improving,” he stated.

The senate president noted that the upper chamber would continue to engage defence and security agencies through appropriate committees to ensure that the follow-up engagements were sustained.

On the 2023 general election, Lawan expressed the willingness of the National Assembly to ensure transparent and credible elections next year. He noted that the innovative amendment to the Electoral Act by the National Assembly provided the Independent National Electoral Commission (INEC) with the wherewithal to deliver on a successful general election in 2023.

Lawan said, “The year 2023 is a momentous period for Nigeria, as elections will be held across the country. Nigerians are expected to exercise their franchise.

“Therefore, the senate, indeed the National Assembly, will work with Independent National Electoral Commission (INEC) to ensure very successful, transparent, and credible elections.

“We are ready to support INEC in all possible ways as a legislature. Already, the timely amendment of the Electoral Act 2022 has provided very important innovations in ensuring better electoral climate.”

Buhari Seeks National Assembly Approval for N402bn to Settle Debts

President Muhammadu Buhari, in separate letters yesterday, requested the Senate and House of Representatives to approve the issuance of promissory notes totalling over N402 billion.

The first request to the Senate, which amounted to N375 billion, was read at plenary by the senate president and it was meant to settle outstanding claims owed various exporters.

Other debt payment requests to the Senate contained in the letter were to be routed through the DMO. They included N6.706 billion for Kebbi State Government for the construction of federal roads in the state and N2.706 billion for Taraba State Government, also for the construction federal roads there.

Buhari, in another request, also read at plenary by Lawan, sought the Senate’s approval for the issuance of N18.623 billion promissory note for Kebbi State Government.

The president, in his letter, said the payment of N18.623 billion to Yobe State Government through the DMO would help the state to offset funds expended on the execution of five different federal road projects in the state.

Buhari, in the two letters, appealed to the senators to treat his requests with dispatch.

Meanwhile, Buhari, in another letter of request, asked the Senate to screen for confirmation the appointment of Mohamed Sabo Lamido as Executive Commissioner, Finance and Accounts of the Board of Upstream Regulatory Commission.

Lamido’s appointment, as explained by the president, was necessitated by the death of Hassan Gambo, who hitherto served in that capacity before his death.

The president, in a separate letter to the House of Representatives, also sought consideration and approval of the issuance of promissory notes by the DMO for the construction of federal roads in Yobe, Kebbi, and Taraba States.

In the two letters dated September 16 and read by the speaker at the plenary, the president said while Yobe State, as approved by the Federal Executive Council (FEC) will get N18, 663,843,119.39 for the execution of five road projects, Kebbi will get N6, 706,835,495.12 for the construction of two road projects, and Taraba will get N2, 470,525,729.53 for one road project.

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