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

15th Hijrah: Muslim Clerics Task Nigerians On Good Morals

Published

8 hours ago

July 26, 2024

Sahara Weekly

15th Hijrah: Muslim Clerics Task Nigerians On Good Morals

– as Speaker charges religious leaders on impactful messages

Nigerians, irrespective of religious affiliations, must begin to embrace good morals and practise honesty, two guest lecturers at the 15th Annual Hijrah Lecture of the Lagos State House of Assembly, have urged.

This is as the Speaker of the House, Rt. Hon. Mudashiru Obasa, also charged Nigeria’s religious leaders to teach messages with greater positive impacts on citizens.

Sheikh Sulaiman Onikijipa Al-miskinubilahi, general overseer of Al-Amani Islamic Organisation, and Sheikh Ridwanullah Jamiu, Chief Imam of the Central Mosque, Lekki Phase 1, said moral conducts and honesty would help create a decent society.

Speaking at the event with the theme: ‘The Increasing Wave Of Moral Decadence In The Society’, which held at the Assembly complex on Friday, the guest lecturers condemned the spate of moral decadence in the society.

Dr. Jamiu told guests that there was need to enforce laws against anti-decent practices like homosexuality, gambling, adultery and corruption.

According to him, Allah blesses those who are kind, just and are morally upright.

“People should run away from three things: indecency, aggression and wickedness. For a society to progress and develop, it must move away from what Allah kicks against.

“Justice means giving people their rights. As a boss, you have duties to your employees. Treat others the way you expect to be treated. Allah commands kindness and generosity,” he said while urging parents to be role models to their children.

On his part, Sheikh Onikijipa lamented what he described as a growing level of corruption in the society.

“At this stage of our existence, we all know that almost everyone is corrupt,” he said while urging leaders to be more transparent.

The cleric further stressed that leaders must be determined to end moral decadence in the society, adding: “See the way the government stopped the abuse of naira with necessary legislation. The same should be done for other forms of moral decadence in the society.

“There is no religion if we don’t have morals. If you observe all the five pillars of the Islam and you are morally corrupt, then you are deceiving yourself.

“If you pray regularly and you don’t have morals, then it is a waste of time. Indecent dressing should be condemned in all places,” he said.

While noting that Nigeria is challenged at the moment, Onikijipa appealed to citizens to be patient with the administration of President Bola Tinubu.

He urged religious leaders and citizens in the country to dedicate a day for fasting and prayer instead of embarking on a protest, which has a tendency to escalate into destruction of properties.

In his remarks, Speaker Obasa said everyone has roles to play in achieving an upright society.

Obasa, who said that Hijrah is meant to celebrate the clerics, added: “You would be proud of the group you belong to when people feel your impact. We should ensure that we change our immediate environment and make things better in our time.

“We must all join hands to make our society better so that we can all have a morally upright place. It is not enough to make laws, people must exhibit good qualities.”

Eromosele Ebhomele
Chief Press Secretary to the Speaker of the Lagos State House of Assembly.

Politics

Planned Protest: Tinubu, Sultan, Ooni, NSA, IGP In Emergency Meeting

Published

1 day ago

July 25, 2024

Sahara Weekly

Planned Protest: Tinubu, Sultan, Ooni, NSA, IGP In Emergency Meeting

The protest against economic hardship, which is gaining traction on social media, has been scheduled to be held across all states in August.

As the planned ‘EndBadGovernance’ protest slated for August draws close, President Bola Tinubu on Thursday entered an emergency closed-door meeting with top traditional rulers, security top brass in his government and governors of his party, the ruling All Progressives Congress (APC). The high-delegation meeting was held at the State House in Abuja, the nation’s capital.

The APC governors were led to the meeting by the Chairman of the Progressives Governors’ Forum and Imo State Governor, Hope Uzodinma.

Some first-class traditional rulers were spotted at the meeting with the President. They include the Ooni of Ife, Oba Enitan Ogunwusi; the Sultan of Sokoto, Muhammadu Saad Abubakar III; and other traditional leaders across the country.

The meeting was also attended by the National Security Adviser (NSA), Nuhu Ribadu; Inspector General of Police, Kayode Egbetokun; as well as ministers and other members of the President’s cabinet.

A delegation of Islamic scholars (Ulamas) later joined the high-powered meeting with the President.

Last-Minute Efforts
Tinubu, former Lagos governor, who was sworn in as President in May 2023, has appealed to displeased youths to shelve the planned ‘EndBadGovernance’ protest slated for next month.

As part of moves to placate aggrieved citizens, the President sent a bill to raise the minimum wage from N30,000 to N70,000 to the National Assembly this week. Both chambers of the legislature speedily passed the bill on Tuesday, awaiting the President’s assent.

On Thursday, the military authorities warned that unscrupulous elements plan to hijack the protest and use it to stage anarchy like what was recently witnessed in East African country Kenya.
The police had also warned against bloody demonstrations come next month just as Uzodimma surmised that the protest could be hijacked and turn violent like the EndSARS nationwide protest against police brutality back in October 2020.

The protest against economic hardship, which is gaining traction on social media, has been scheduled to be held across all states of the Federation as well as the Federal Capital Territory (FCT), Abuja, in August. The organisers of the protest have been faceless.

Prices of food and basic commodities have gone through the roof in the last months, as Nigerians battle one of the country’s worst inflation rates and economic crises sparked by the government’s twin policies of petrol subsidy removal and unification of forex windows.

Politics

Tinubu mourns Iwuanyanwu

Published

1 day ago

July 25, 2024

Sahara Weekly

Tinubu mourns Iwuanyanwu

President Bola Tinubu has extended his condolences to the family of the President-General of Ohanaeze Ndigbo Worldwide, Chief Emmanuel Iwuanyanwu, who passed away on Thursday.

Tinubu’s condolence message is conveyed in a statement signed by his Special Adviser on Media and Publicity, Ajuri Ngelale, titled ‘President Tinubu mourns Chief Emmanuel Iwuanyanwu.’

The family confirmed his demise on Thursday evening in a statement that partly read, “The Iwuanyanwu family of Umuohii Atta, in Ikeduru Local Government Area of Imo State, announces the demise of our patriarch, Chief Emmanuel Chukwuemeka Iwuanyanwu-Ahaejiagamba Ndigbo.

“Chief Iwuanyanwu died on Thursday, July 25, 2024, after a brief illness. He was aged 82.”

He was an accomplished businessman and notable politician.

Ngelale said, “President Tinubu condoles with the Imo State Government, the friends and associates of the deceased, and Ndi Igbo over this irreparable loss.

“The President affirms that Chief Iwuanyanwu will always be remembered for his remarkable legacy.”

Tinubu, therefore, prayed for the repose of the soul of the departed elder statesman and comfort for his family