THE Federal Government plans to spend a whopping N2.08tn to service its debts in the next three years. This came just as findings also showed that the country’s debt profile under the current Minister of Finance, Dr. Ngozi Okonjo-Iweala, has risen by about N980bn from $42.23bn in 2011 to $48.36bn currently.
Nigeria’s debt profile under the Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala, has risen by about N980bn from $42.23bn in 2011 to $48.36bn currently. The figure came just as findings also revealed that the Federal Government planned to spend a whopping N2.08tn to service the country’s debt in the next three years.
The country’s total debt stock, according to figures obtained from the Debt Management Office, currently stands at $48.36bn, which is made up of external debt of $6.67bn and domestic debt of $41.69bn. Okonjo-Iweala was instrumental in helping the country to secure a debt relief of $18bn in 2005 during her first appointment as minister of finance under the former President Olusegun Obasanjo.
Notwithstanding the country’s huge foreign reserves of about $46bn, analysts have expressed concern that the nation is gradually returning to the era of huge debt obligation. The figures for debt servicing as well as the county’s debt stock are contained in the Medium Term Expenditure Framework and Fiscal Strategy Paper of the Federal Government, a copy of which was obtained by our correspondent. They both fulfil a requirement of Section 11 of the Fiscal Responsibility Act 2007, which stipulates that the minister of finance shall prepare the MTEF and FSP and get them approved by the Federal Executive Council and the National Assembly. The document stated that while N591.76bn was utilised in servicing the nation’s debt this year, the sum of N712bn, N684bn and N684bn would be used for the 2014, 2015 and 2016 fiscal periods, respectively. According to the document, fiscal deficit is projected to rise slightly to about 1.9 per cent of Gross Domestic Product in the 2014 budget, up from 1.85 per cent projected for 2013. This, the document stated, was as a result of declining revenue which the country had witnessed in recent times. It said, “The fiscal deficit is projected to rise slightly to about 1.9 per cent of GDP in the 2014 Budget, up from 1.85 per cent projected for 2013, as a direct consequence of the declining revenue but helped by the expenditure restraint.
“As our concerted efforts to increase oil and non-oil revenue begin to yield benefits, government will redouble its efforts to reduce the fiscal deficit. “Government will continue to exercise fiscal prudence and limit its borrowing requirements in compliance with the Fiscal Responsibility Act, 2007. “In this regard, new borrowing in 2014 will be N572bn, slightly down from N577bn in 2013.”
Okonjo-Iweala had in a report of the activities of the Ministry of Finance within the last two years said that $12bn (N1.92tn) funding agreements had been concretised by the Federal Government to finance the real sector of the economy. The amount was sourced from financial institutions such as the World Bank, African Development Bank, China Export-Import Bank and Islamic Development Bank at concessionary single digit interest rate and a moratorium of about 40 years.
The affected sectors are agriculture (N202bn); environment (N91.2bn); transport (N640bn); water resources (N126.03bn); Niger Delta (N50bn) and health (N30.35bn). Others are power (N451.12bn); education (N39.97bn); Information and Communication Technology (N16bn) and job creation (N94.4bn).
"When shall we recover from all these GBESE" ??
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