The International Monetary Fund had recently raised an alarm over Nigeria’s growing debt profile noting that it could be worse and needs to be carefully managed.
Data from the Debt Management Office puts the nation’s total foreign and domestic debt stocks as at September 2017 at $66.63 billion or N20.373 trillion.
The country’s debt profile for the Federal and 36 states showed a continuous rise in the last two years, growing from $10.718 billion in 2015 to $11.406 billion in 2016, hitting $15.352 billion or N4.693 trillion in September 2017.
Details of the proposed 2018 budget also show that the government intends to spend 2.01trillion will be spent on debt servicing.
Tales of borrowings in the past
It would be recalled the Debt Management Office ( DMO) which was established to centrally coordinate the management of Nigeria’s debt recently listed $300 million Diaspora Bond and $3 billion dual-tranche Eurobond issuances at the Nigerian Stock Exchange ( NSE).
The agency explained that the $300m it had borrowed from Nigerians in the Diaspora was part of the $5.5bn approved for borrowing by the National Assembly.
According to DMO $2.5bn was approved for the part-financing of the deficit in the 2017 Appropriation Act. The Act makes a provision for new external borrowings of N1.068tn, an equivalent of about $3.5bn. Out of this amount, only $300m has been borrowed through the issuance of a Diaspora Bond in June 2017.
The DMO issued a 100billion 7-year debut Sukuk Offer, the money raised is expected to be channelled towards the construction of some major highways across the country. The bond which was oversubscribed offered another window for the Government to raise funds to close Nigeria’s infrastructure gap.
The DMO had indicated that funds would be utilized for the construction and rehabilitation of 25 Roads across the 6 Geopolitical zones and with the conclusion of the Offer, the Federal Ministry of Power, Works and Housing can now actively commence work
The DMO also listed an N10.6 billion Green Bonds, also known as Climate Bonds, to finance projects that have a positive impact on the environment and provide a solution to climate change.
Getting Value from these borrowings
Twice in the last three decades, Nigeria has found itself in the critical situation of not being able to service or repay its domestic and foreign debt, with the potential of being declared, technically insolvent and bankrupt
According to the Director General of the Debt Management Office, Patience Oniha, the DMO’s strategy is to continuously restructure the Federal Government’s debt portfolio and replace short-tenured bonds with long tenor and high rates with lower.
But, has the agency been able to live to its responsibility of advising levels of government on how best to manage their growing debt profile? Have Nigerians benefitted from the plethora of borrowings in the past?
These borrowings which are meant to finance critical infrastructure and capital projects and not on recurrent expenditures like payment of salaries in most cases the funds end in private pockets while the nation continues to suffer from infrastructural imbalance.
More worrisome is the fact that debt is now growing faster than the rate of Gross Domestic Product (GDP). When will Nigerians get a good value for all these borrowings?
The country’s attitude to borrowing is a national disgrace and this calls for re-orientation of our borrowing system. Nigerians are being misinformed to believe that borrowing is inevitable for economic growth. Whatever the likely benefits derivable from the huge internal borrowing, it is bound to have negative economic consequences on the citizens and future economic growth.
However, with the current economic realities, it is important that the government should initiate a comprehensive debt servicing plan. In designing the plan, the government needs to carefully re-examine the nation’s borrowing culture with its attendant consequences.
Leadership and corruption remain a hindrance to national success in the area of debt servicing. Of particular interest is the diversion of funds meant for debt servicing by people at the helms of affairs.
While introducing checks and balances to reduce the nation’s domestic debts profile, greater attention needs to be paid to viable investment initiatives. If the government can ensure huge returns for private investors, the impacts will be better felt by all and sundry instead of continuous borrowing.
Irrespective of the present economic challenges, the government should stop paying lip service to the problem of national debt as this remains a major obstacle to national development.
The government should not continue to mortgage Nigeria’s future growth and prosperity on foreign loans that will impose a crushing burden on us. The next generation deserves better than a nation crippled by huge foreign debts.
FG to facilitate removal of tax on minimum wage, as NLC suspends strike
The FG has stated that it will work to facilitate the removal of tax on minimum wage.
The Nigerian Government says it is working to facilitate the removal of tax on minimum wage and also agreed to work with labour unions in the housing and gas schemes as the Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC) suspended the planned nationwide strike after a consultative meeting with the FG.
This was announced in a statement by the Nigerian government on Monday morning, following meetings held between FG and Labour unions on the 15th, 24th and 27th of September.
NOTICE ON RECENT ENGAGEMENT BETWEEN FGN AND ORGANIZED LABOUR:
The Federal Governmment and Organised Labour (NLC, TUC and others) held consultation meetings on September 15, 24 and 27, 2020.
Following the extensive deliberations, the following resolutions have been reached:
— Government of Nigeria (@NigeriaGov) September 28, 2020
Nairametrics reported earlier the NLC and the Trade Union Congress (TUC) have suspended the planned nationwide strike and protest that was to commence on Monday, September 28, 2020, over the recent hike in electricity tariff and petrol pump price.
In the agreement between the Federal Government and organized labour, the hike in electricity tariff is to be suspended for a period of 2 weeks, while the new pump price of petrol is to remain unchanged.
FG and Labour agreed to set up a technical committee on Electricity Tariff reforms. The terms of reference for the technical committee include;
- To examine the justification for the new policy on cost-reflective electricity tariff adjustments.
- To look at the different Electricity Distribution Companies (DISCOs) and their different electricity vis-à-vis NERC order and mandate.
- Examine and advice government on the issues that have hindered the deployment of the 6 million meters.
- To look into the NERC act under review with a view to expanding its representation to include organized labour.
In the recent statement, the FG said, “We will ensure delivery of 1 million CNG/LPG Autogas Conversion Kits, Storage Skids and Dispensing Units under the Nigeria Gas Expansion Programme, by December 2021. A Governance Structure for this project will be established, and will include Labour Representatives. FG will work to facilitate removal of tax on minimum wage… Ongoing FG Housing Initiatives will have 10 percent allocated to Nigerian workers.”
The FG also announced that it will provide Labour with 133 LPG-driven Mass Transit Buses immediately, which would be used in cities across the nation and would be extended to all LGAs before December 2021.
Baba Bajaj: Runs faster, lasts longer, covers 5500 kms on tough Nigerian roads
The rally took up the challenge of proving how credible the product and also engaged the stories of the riders.
For the first time ever, Nigeria experienced its own keke rally that kicked off on 7th August from the Stallion Auto Keke – Ijesha Showroom for Bajaj Kekes. The Stallion Bajaj Keke Rally has now completed a tough terrain of 5594 kms through 27 cities and 18 states in the West, East and North Central in less than 41 days. It consisted of a team of 5 experienced riders and the Stallion Bajaj officials and security agents. Collectively the convoy covered more than 26000 Kms without any product issues.
Managing Director for the business, Mr. Manish Rohtagi stated that “The Keke Rally really boasts on how the New Baba Bajaj is tough, strong, reliable, and well equipped for the Nigerian roads. Having covered almost more than 5000 kms the Kekes did not face any performance or maintenance challenges. It kept its brand promise of “Runs Faster, Lasts Longer” through every rider who was a part of this rally.”
The rally was flagged off from Lagos and covered states like Ogun, Oyo, Kwara, Kogi, Benue, Enugu, Ebonyi, Cross River, Akwa Ibom, Abia, Rivers, Anambra, Delta, Edo, Ondo, Ekiti, Osun, to prove the durability of Bajaj Keke. It even spread the message of urging people of Nigeria to be responsible in maintaining hygiene to curb the spread of Corona Virus. The Stallion Bajaj Keke Rally visited celebrated cultural and historic sites in each state highlighting and sharing the Nigerian culture of host communities. The journey to these sites brought forth the stories around it to encourage connecting the youth to their rich heritage.
The vision from this rally was not only to take up the challenge of proving how credible the product is but also engaging in the stories of these riders that will go on to make the brand what it is. The alliance of Stallion and Bajaj will continue to improve lives by going an extra mile providing rider-training facilities, scholarship programmes, mechanic empowerment programmes, ease in financing, ease of spare part availability and differentiated customer service through its existing footprints within the auto industry.
Bajaj Auto Ltd. is a world leader in the intra city vehicle space. Loved in 70 countries the brand stands for integrity, dedication, resourcefulness, and determination to succeed and empower. It is a well-known brand for its durability, speed and manuverability and is the pioneer brand of tricycles in Nigeria loved by millions. It’s a keke for the people engineered for a smooth journey and better livelihood.
After 22 years, NBS is set to commence National Business Sample Census
The National Business Sample Census is expected to commence on October 12 2020, and end on December 12 2020.
The National Bureau of Statistics, with the support of the World Bank, has commenced the process of implementing the 2020 National Business Sample Census (NBSC) in Nigeria. This is exactly two decades and two years after the last business census of establishments in the country.
This disclosure was stated in a circular signed by Ichedi, Sunday Joel, Head, Public Affairs & International Relations Unit, which was released by the Statistician-General of the Federation this morning.
The Survey which is coming after a similar one conducted twenty-two years ago (1997/98) is necessary, especially now that the current government is re-structuring the economy for faster growth through support to Small, Medium and large-scale enterprises, in order to increase their productivity.
The National Business Sample Census is expected to last two months from October 12 to December 12.
The main objectives of NBSC includes:
• To compile, frame, and develop instruments and concepts, establish standards and methodology for industrial and business surveys in Nigeria.
• To serve as a benchmark for updates of subsequent commercial and industrial sector statistics.
• To develop a national directory of commercial and industrial business establishments, with all their associated social and economic characteristics
• To provide the country with comprehensive and detailed information about the structure of the Nigerian economy.
The Census will cover all the thirty-six (36) states of the Federation and FCT, with establishments in all economic sectors involved in the exercise.
For the avoidance of doubt, the establishments to be covered should have a fixed structure and location, a separate shop with a different entrance, and enclosed from dwelling place (in the case of residential areas), shops should have locks and keys for a market setting. While kiosks and shops under the umbrella are not to be listed during the census.
All commercial and industrial businesses in each LGA will be identified and listed by the state. Name, location address, postal address, phone number, email address, year of commencement, number of activities engaged in, main type of activity, and others are questions that will be asked.
NBS enumerators with customized T-Shirts and Face Caps will visit your establishment, at any date within the stipulated period, to collect necessary information for the census. Please oblige them with the information, as your cooperation is germane towards the successful execution of the census exercise.
However, the Bureau wishes to assure you that any information given will be kept in absolute confidentiality, and will not be divulged to a third party.