Politics

As FG Borrowing Exceeds N22trn, Impact on Economy Negligible

Published

4 years ago

July 2, 2020

CUSTOMSGATE: $3 BILLION PROJECT RUNS INTO DISPUTE

The seeming voracious appetite for borrowing by the Federal Government (FG), undertaken in the past 5 years has continued to remain a cause for concern to many, including financial experts, Nigerians and analysts.

As at the end of 2019, the FG had racked up about $67 billion – some N22 trillion – in debt, according to data from the Debt Management Office or (DMO).

With about 35 percent of the loans taken externally and still counting, experts have noted that the funds sourced as loans intended to be injected in capital projects are often spent on recurrent expenditure where there is high presence of corruption and is mainly the reason for little or no results with little impact whatsoever felt by Nigerians.

According to BudgIT 2019 report, Nigeria’s debt service to revenue ratio is has hit over 60 per cent relative to 22.5 per cent threshold advised by the World Bank; which means for every N100 earned by the government, N60 is used for debt servicing, leaving the government with N40.

Reports from the DMO show that, Nigeria’s debt, at the end of March 2015, stood at N12 trillion.

At the end of June 2015, this debt had risen slightly to N12.1 trillion.

By the end of June 2018, total public debt had almost doubled to N22.4 trillion. The debt office said the increase comprised of a $2.5 billion Eurobond issued by the government in February 2018.

This took Nigeria’s total debt to US$73.2 billion, using the Central Bank of Nigeria’s 2018 exchange rate of N305.

In any case, the DMO justified the borrowings in its 2017 report on Nigeria’s national debt, stating that the country’s total public debt stock is relatively low vis-à-vis the country’s GDP, the report also added that increased funding requirements needed to sustain economic recovery, address the huge infrastructural deficit, as well as meet budget financing requirements, would entail enormous funding resources, including more borrowing.

The worry about FG borrowing analysts have further argued is largely about transparency and not that borrowing is bad.

“If you take a loan based on infrastructural gap, the people should be able to see and feel the impact of the loan and see the gradual and consistent close in the infrastructural gap,” said Joe Femi Dagunro, Ex -President, Nigerian-German Business Group.

He explained: “If our country’s debt service to revenue ratio, which is about 60 per cent and our growth rate, is about two per cent, there is a good reason for concern. I want the government to focus on some key areas of infrastructural development such as electricity, health, agriculture, road construction, power and maintenance.”

The ratio is forecast to rise to 75 percent.

Dagunro called on the FG to be transparent about its borrowing and explain full details of the loans and what they have been used for.

Prof Olufemi Saibu of the economics department at the University of Lagos focuses on development macroeconomics and public finance.

“The debt profile is high and now getting to the red line” Saibu said. “The problem is that the debt cannot continue to increase; there must be a check on it. And the question is, what are they using the debt for? The quality of projects, productivity and impact of the projects are what matters.”

Former Deputy Governor, Central Bank of Nigeria, Obadiah Mailafia also commented on the country’s debt profile, during an interview on channels, saying there is nothing wrong with borrowing but the purpose must be well spelt out to achieve a well-defined objective.

“From 2014 at N11trillion to N22.4 trillion in 2018, what we have is a 100% jump. If you recall in 2005, when we settled the Paris club debt, our total debt stock was about $36 billion and today we have double that figure already. That worries me greatly,” Mailafia said.

Chairman, Chartered Institute of Bankers of Nigeria, Abuja chapter, Prof. Uche Uwaleke said the Federal Government’s strategy of increasingly resorting to external borrowing to fund budget deficit finds explanation in the increasing cost of servicing domestic debt.

This disposition, he added accounts for the growing quantum of foreign debts contracted on commercial terms in recent times with much emphasis on tapping the Eurobond markets.

“Nevertheless, the preponderance of fragilities in the Nigerian economy warrant a cautious approach to new external borrowing – one that is shy of non-concessional loans contracted purely on commercial terms such as Eurobonds. Indeed, the country can only hope that there are no more currency shocks in the near future,” Uwaleke said.

Politics

Go out and vote, it’s your right – Ogun APC charges electorate

Published

1 day ago

November 14, 2024

Sahara Weekly

Go out and vote, it’s your right – Ogun APC charges electorate

As the party campaigns for the 2024 Local Government election in Ogun State draws to a close midnight of today (Thursday), the All Progressives Congress, APC, has charged registered voters in Ogun State to go out and exercise their fundamentals rights on Saturday “without any fear whatsoever”.

Addressing the grand finale of APC in Odogbolu Local Government, the Publicity Secretary of the party in Ogun State, Tunde Oladunjoye said, “APC has done very well under the administration of Prince Dapo Abiodun, and we are poised to win the chairmanship and councilorship elections overwhelmingly come Saturday”.

Oladunjoye, who is also Senior Media Consultant to Governor Dapo Abiodun on Media, thanked the Odogbolu people for showing massive support to the APC in the local government.

“With what I have seen here, victory is sure. I want to thank you on behalf of the Governor of Ogun State, Prince Dapo Abiodun, CON and the Chairman of APC in Ogun State, Chief Yemi Sanusi. “Come out and vote peacefully on Saturday. It is your constitutional duty and obligation.”

Oladunjoye added that people should learn from the chairmanship candidate of the party in Odogbolu local government, Dr. Babatunde Oyetola Diya, who vied for the office about three and half years ago and did not get it, but remained faithful in the party and continued to reach out to people with his humanitarian efforts.”

Politics

Anthony Ojo congratulates Gov Okpebholo, confirms Edo Central Senate aspiration

Published

2 days ago

November 14, 2024

Sahara Weekly

Anthony Ojo congratulates Gov Okpebholo, confirms Edo Central Senate aspiration

Influential Edo State politician, Anthony Ojo has congratulated Senator Monday Okpebholo after being sworn-in as the new Governor of the State.

In his congratulatory message, Ojo expressed confidence in the abilities of Gov Okpebholo to bring the dividends of democracy close to the people of Edo State.

“The people of Edo State have total trust in your five-point agenda, capacity as a leader, and this is evident with their immense show of love. We have no single doubt that under you, this state will progress to the promised land,” the statement reads.

Meanwhile, Anthony Ojo has confirmed his aspiration to contest the Edo Central senatorial seat under the flagship of the All Progressives Congress (APC), a position previously held by Senator Okpebholo before he was elected governor.

He cited that sharing the same leadership ideologies with Governor Okpebholo, and the keen desire for transformative human and capacity developments in Edo State are the reasons behind his ambition.

He promised to work closely with the Governor to provide succour to Edo citizens.

Politics

Appeal Court Further Affirms Udeze-led NEC Of Action Alliance As Valid, Authentic

Published

2 days ago

November 13, 2024

Sahara Weekly

Appeal Court Further Affirms Udeze-led NEC Of Action Alliance As Valid, Authentic

ABUJA – The Appeal Court sitting in Abuja has further affirmed Chief Barr. Kenneth Udeze-led National Executive Committee (NEC) of Action Alliance (AA) elected on 14th March 2021 National Convention of the party as valid and authentic.

Action Alliance, in a statement by its National Secretary, Vernimbe A James said, “the court of appeal Abuja Division today in Appeal Number; CA/ABJ/CV/1163/2024 in a lead Judgement delivered by Hon.Justics Abba Mohammed which was concord by the other two Justices dismissed the appeal filed by Adekunle Omoaje faction through one Miller C.Orgwu ( on behalf of himself and all NEC Members Elected at Action Alliance Elective National Convention of 7th of October,2023, held at OOPL Abeokuta, Ogun State ) against 1, INEC, 2, Kenneth Udeze,3, James Vernimbe, 4, Akinuli Fred Omolere.

“The Court also awarded N400,000 cost against the appellants in favor of the Respondents.

The appeal was about the validity of the powers of Action Alliance NEC under Chief Kenneth Udeze led executive to conduct the party Governorship primary in Ondo State for the upcoming Saturday 16th November 2024, Governorship Election.

“The Federal High Court Abuja Division had earlier In Suit Number; FHC/ABJ/ CS/626/2024 Between Miller Orgwu and others (Omoaje faction) claiming to be authentic NEC of the party against 1, INEC, 2, KENNETH UDEZE,3, JAMES VERNIMBE, 4, AKINULI FRED OMOLERE presided by HON. JUSTICE JOYCE O.ABDULMALIK on 24th, September 2024 dismissed their Claim and validated the Ondo State Governorship Primary Election Conducted by Chief Barr Kenneth Udeze led Action Alliance NEC as valid and authentic, thereby Confirming the Ondo State Governorship Candidate of the party AKINULI FRED OMOLERE as the valid Candidate of the party for the 16th, November 2024 Governorship Election in Ondo State.”

The statement further said: “On 28 March 2022, the FCT High Court Abuja had affirmed and validated the Action Alliance National Convention held on 14th, March 2021 wherein Chief Barr Kenneth Udeze led NEC of the party were elected.

“Dissatisfied with the said Judgement, one Adekunle Rufai Omoaje and others were granted leave of the court of appeal to appeal same Judgement.

“On the 26th, January 2024, the Court of Appeal Abuja Division in Appeal Number; CA/ ABJ/ CV/ 955/22 Between Adekunle Rufai Omoaje and others and Chief Uzewuru Nwachukwu and others further Affirmed the FCT High Court Judgement that earlier validated the Action Alliance National Convention of 14th March,2021 wherein Chief Barr Kenneth Udeze led Action Alliance (AA) NEC of the party was elected.

“Dissatisfied with the appeal court Judgement one Adekunle Rufai Omoaje and others have appealed the Judgement to the Supreme Court of Nigeria in appeal Number: SC/ CV/162/2024 Between Adekunle Rufai Omoaje and others and Chief Uzewuru Nwachukwu and others, the matter is still pending at the Supreme Court of Nigeria which he has abandoned but desperately looking for how to come through the back door to claim the leadership of Action Alliance.”

The statement also explained that “INEC has since Complied with the Judgements validating the 14th, March 2021 National Convention of the party wherein Chief Barr Kenneth Udeze led Action Alliance NEC of the party was elected and uploaded on its website the Name of Chief Barr Kenneth Udeze- National Chairman, Vernimbe A James -National Secretary and other Elected NEC of the party as authentic.

“There is no court ruling or Judgement that Affirmed or validated any other National Convention of Action Alliance (AA) held on any other date apart from the 14th, March 2021 National Convention of the party which Courts have already and variously validated.”

Ezenwa Ibegbunam, who is the Counsel to Chief Fred Omolere, the governorship candidate of the party affirmed by the Court, noted that the judgment has further restated the correct position of the law and a vindication of the previous decision of the Court of Appeal which had earlier affirmed Chief Udeze led executive as the authentic leadership of the Action Alliance.

On his part, Chief Kenneth Udeze has praised the Court of Appeal as a citadel of justice and urged the party members across the country to remain focused.

He further noted that the Judgment has cleared the way for the victory of the party in the Ondo State gubernatorial election.

Source: Daily Independent