Nigeria’s ability to repay its N24.39 trillion debt is in question after the International Monetary Fund (IMF) expressed concern about the rollover risks, arguing Nigeria’s capacity to refinance might drop in the future.
The concern was raised by the Financial Counsellor and Director, Monetary and Capital Markets Department, IMF, Tobias Adrian, while presenting the Global Financial Stability Report at the ongoing joint annual spring meetings with the World Bank in Washington DC.
Nairametrics had reported that Nigeria’s total external and domestic debts rose to N24.387 trillion in 2018. Debt Management Office disclosed that Total Public Debt stood at N24.387 trillion as of December 31, 2018, representing a year-on-year increase of 12.25% in Nigeria’s debt stock.
“Nigeria has been borrowing in international markets but we worry. So, on the one hand, that is very good because it allows Nigeria to invest more; but on the other hand, we do worry about rollover risks going forward.
“At the moment, funding conditions in economies such as Nigeria and other sub-Saharan African countries are very favourable but that might change at some point. And there is a risk of rollovers and there is the risk of whether these needs for refinancing can be met in the future.”
Federal Government rebuff IMF claim
The Nigerian Government countered IMF statement, saying the nation’s debt burden is sustainable, adding that the debt burden will have no negative impact on Nigeria’s economy.
While reacting to IMF‘s statement, the Minister of Budget and National Planning, Senator Udoma Udo-Udoma said steps are being taken to ensure Nigeria doesn’t have a debt problem.
One of the steps is widening of tax collection- This is according to Udoma who spoke after the end of Wednesday’s Federal Executive Council meeting at the Presidential Villa in Abuja.
“With regard to our debts, our debts are sustainable.
“We do have a revenue challenge and we are focusing on that. Once the revenues come up, it will be obvious that we don’t have a debt problem at all.
“We are working on a number of initiatives to increase our revenues. We are looking at initiatives to widen the tax base. We are looking at initiatives to increase efficiency in collection.
“We are looking at a single window, which will help to increase efficiency, custom collections. We are looking at many different ways to improve revenues.
“The debts are sustainable; every nation borrows. We are working on increasing our revenues.”
Just In: DSS invites EFCC’s Acting Chairman, Ibrahim Magu for questioning
A 2016 report had indicted Magu of several criminal acts including diversion of recovered loot.
Ibrahim Magu, the Acting Chairman of the Economic and Financial Crimes Commission (EFCC) has been invited by operatives of the Department of State Services (DSS) for questioning.
Nairametrics gathered Magu was invited Monday afternoon by the DSS.
Tony Amokedo, a spokesman for Ibrahim Magu claims Mr. Magu wasn’t arrested as reported in a section of the media, but was invited for questioning by DSS officials. He said Magu was invited for a Panel set up by the Federal Government investigating corruption allegations against Magu.
Also, following earlier reports of Magu’s alleged arrest, the DSS quickly released a statement through its Public Relations Officer, Peter Afunanya, Ph.D, denying the arrest of the chief of Nigeria’s anti-graft agency.
“The Department of State Services (DSS) wishes to inform the public that it did not arrest Ibrahim MAGU, Acting Chairman of the Economic and Financial Crimes Commission (EFCC) as has been reported by sections of the media. The Service, has since, today, 6th July, 2020, been inundated with enquiries over the alleged arrest,” DSS statement read.
Last month, the Attorney-General of the Federation, Mr. Abubakar Malami (SAN), wrote to Buhari, recommending the removal of Magu, accusing him of misconduct, insubordination and diversion of recovered loot.
A 2016 report by the DSS revealed Ibrahim Magu lives a “high-profile lifestyle”. The report revealed Magu lives in a house rented for N40 million at N20 million a year which was paid for by one retired Air Commodore, Umar Mohammed.
Magu is also accused of using private jets belonging to Mohammed and going on trips with bank executives being investigated by the EFCC.
The report also revealed Magu was guilty of withholding EFCC files, obstruction of justice and sabotage by the Nigerian Police Commission in 2010.
Over 20% of N-Power beneficiaries are now business owners – FG
The Minister emphasized the President’s vision of lifting 100 million Nigerians out of poverty.
The Minister of Humanitarian Affairs, Disaster Management and Social Development, Sadiya Umar Farouq, has said that about 109,823 beneficiaries of the N-Power programme now have their own businesses.
This represents about 22% of the 500,000 Nigerians that have benefited from this programme since its inception.
This was disclosed in a statement by the Minister’s Special Assistant on Strategic Communications, Mrs Halima Oyelade on Saturday, July 4, 2020. She said that the beneficiaries of Batch A and B of N-Power have established businesses in their communities.
The Minister in the statement said, “Statistics like this gives me joy and once again, I want to say congratulations; I look forward to hearing amazing testimonies and meeting beneficiaries of this programme who will be doing great things in the future”.
She emphasized President Muhammadu Buhari’s vision of lifting 100 million Nigerians out of poverty in the next 10 years by creating opportunities that would improve the productivity of Nigerian youths for entrepreneurship or employment.
Going further the minister said, “Thus, the need to find ways to engage them is of utmost importance. However, the commencement of the enrolment of Batch C was predicated on the need to give more Nigerian youths the opportunity to benefit. This is because, keeping only 500,000 beneficiaries for four years defeats the purpose of Mr President’s vision, hence the need to scale up and was in no way meant to be punitive.”
While acknowledging the beneficiaries’ contributions, Farouq said, ‘’You are our model N-Power beneficiaries. Please avail yourselves of all opportunities provided by government like interest-free loans and leverage on those opportunities while using N-Power as a stepping stone”.
The minister said the ministry is working at resolving some of the challenges facing the programme which include delays in the payment of stipends, beneficiaries not showing up at their places of primary assignments and people accessing the programme while gainfully employed elsewhere.
The minister also assured beneficiaries that outstanding payments would be made and transition plans were ongoing and would be duly communicated to them on their platform.
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Some of the beneficiaries of the programme gave good testimonies about the impact of the programme in their lives and all expressed their gratitude to the Federal Government for the opportunity.
Nairametrics has reported the opening of application portal for batch C of the programme with effect from 11.45 pm on June 26, 2020. There have been over 3 million applicants that have shown interest in batch C of the programme in about a week.
Nigeria’s debt rises to $79.5 billion, as debt to revenue ratio worsens
According to data obtained from DMO, $27.66 billion (N9.9 trillion) is the total external debt.
Nigeria, Africa’s largest economy’s total public debt rose to $79.5 billion (N28.63 trillion) as of the first quarter of 2020, which is March 31, 2020. This represents a 15% increase from the figure that was recorded for the corresponding period in 2019, which was about $69.09 billion (N24.94 trillion).
This was disclosed in a latest publication by the Debt Management Office (DMO) on Friday June 3, 2020.
Nigeria has seen its debt stock rise sharply in recent years as the country tries to fund infrastructural and developmental projects and boost its fragile economy, which has been in and out of recession. The country’s economy has been projected to fall into recession again, due to the adverse impact of COVID-19 that has seen oil prices crash globally.
According to data obtained from DMO, $27.66 billion (N9.9 trillion) is the total external debt. This represents 34.89% of the total public debt stock. Whereas, $51.64 billion (N18.64 trillion) is the total domestic debt, which represents 65.11% of the total public debt.
The Federal Government accounts for 50.77% of the total domestic debt, which is $40.26 billion (N14.53 trillion), whereas the State Governments and Federal Capital Territory account for 14.34% of the total domestic borrowing which is $11.37 billion (N4.11 trillion).
Nigeria has been under a lot of fiscal crisis following the crash of oil prices triggered by the coronavirus pandemic. The oil sector accounts for about 90% of the country’s foreign exchange earnings and about 60% of its total revenue.
The country, which had lined up a series of debt issue this year, had to halt the external commercial borrowing due to oil price collapse. The Minister for Finance, Zainab Ahmed, had last week disclosed that the country would no longer go ahead with its Eurobond debt issue.
The Nigerian government, for now, is focusing on the domestic markets and concessionary loans to help fund the 2020 budget deficit which is made worse by drop in revenue. In the recently approved 2020 revised budget, the federal government is expected to borrow N850 billion from the domestic market.
This rising debt has put a lot of pressure on the government’s resources as it spent $1.69 billion (N609,13 billion) to service its domestic debt in the first quarter of 2020 alone.
Nairametrics had reported that Nigeria’s global rating is at risk due to the sharp rise in the country’s sovereign debt and a growing finance gap. According to a report from the global rating agency, Fitch Ratings, this could trigger a rating downgrade as policymakers struggle to stimulate growth and deal with the impact of low oil prices and sharp drop in revenue.
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According to Fitch, the country’s debt to revenue ration is set to deteriorate further to 538% by the end of 2020, from the 348% that it was a year earlier.