Dr. Ngozi Okonjo-Iweala
- Says wage increase caused huge debt profile
- Danjuma wants Buhari to probe Jonathan's regime
By Festus Akanbi in Lagos, Ndubuisi Francis, Onyebuchi Ezigbo, James Emejo in Abuja and Wole Ayodele, Jalingo
Coordinating Minister for the Economy (CME) and Minister of Finance, Dr. Ngozi Okonjo-Iweala, on Saturday put the nation’s total debt stock at $63.7 billion, which encompasses multilateral as well as domestic loans by successive federal and state governments since 1960. She said that of this figure, $21.8 billion was incurred under the outgoing government of President Goodluck Jonathan.
Coordinating Minister for the Economy (CME) and Minister of Finance, Dr. Ngozi Okonjo-Iweala, on Saturday put the nation’s total debt stock at $63.7 billion, which encompasses multilateral as well as domestic loans by successive federal and state governments since 1960. She said that of this figure, $21.8 billion was incurred under the outgoing government of President Goodluck Jonathan.
Her disclosure is coming on the heels of remarks by Vice
President-elect Yemi Osinbajo that the outgoing administration of
President Jonathan will be leaving a huge debt of $60 billion for the
incoming administration of Muhammadu Buhari.
Speaking during an interactive session with finance correspondents in
Abuja on Saturday, she said it was wrong to blame the Jonathan
administration for the huge debt stock which she said was accumulated
over a long period of time by several administrations.
Giving insight into the $21.8 billion debts incurred under the Jonathan
government the minister said the debts were made up of $18 billion
domestic component and $3.7 billion external component.
According to her between 2007 and 2011, a debt of $17.3 billion was
recorded while between 2012 and 2015, the debt incurred stood at $18.1
billion.
She explained that the leap in the debt profile between 2012 and 2015
was triggered off by the 53 per cent wage increase implemented by the
late Umaru Yar’Adua administration in a fell swoop.
This, she said, skyrocketed government’s borrowing from N524 billion to
over N1 trillion in order to meet the salary increase, adding that the
country’s domestic debt increased by $18.1 billion mainly because of
the 53 per cent increase in the pay of civil and public servants.
The minister stated that at the time of the salary increase, she was
still with the World Bank, adding that she had written and warned on the
consequences of acquiescing to such a huge increase.
Absolving the Jonathan administration of blame, the minister said the
government had in deed taken a careful and meticulous approach to
managing the nation’s debt, noting that the present administration, for
the first time in the nation’s history, retired a domestic debt of N75
billion in 2013.
Commenting on the $63.7 billion debt stock, the minister said $9.7
billion or 15 per cent is external while $54 billion or 85 per cent
represents domestic debt. She added that the states’ share of the $9.7
billion external debt is 33 per cent while the states’ share of the $54
billion is 20 per cent.
Okonjo-Iweala pointed out that Nigeria still has one of the lowest
fiscal deficits in the world with debt to GDP ratio of about 1.5 per
cent of the budget, adding that the government has used the right tools
to manage the economy and has only borrowed at very low concessionary
rates to fund important infrastructure initiatives in agriculture,
aviation, power, roads, health, and water resources, among others.
The minister added that where the country should watch carefully is the debt service to revenue, which is at 22 per cent.
She argued that it was wrong to “to characterise the Jonathan
administration as leaving $63 billion debt since the country’s debt
stock was accumulated over a long time by several administrations.
Commenting on the lingering fuel scarcity, the minister said most of
the marketers were blackmailing the government and by extension,
Nigerians.
According to her, Nigerians should rise up and ask questions why the
marketers reneged on their promise a fortnight ago after they openly
told the entire country that they had sorted out their differences with
the government and that they were going to end the scarcity.
She said soon after that open declaration, the marketers went back and
shut down their supply chains, noting that they had requested her to
sign that government was going to pay them N159 billion as foreign
exchange differentials out of the N200 billion claims they were making.
The Finance Minister stated that the marketers, who had earlier agreed
with the setting up of an ad hoc committee made up of their
representatives, those of Petroleum Product Pricing Regulatory Agency
(PPPRA), Debt Management Office (DMO), and Central Bank of Nigeria
(CBN) to verify their claims suddenly backed out.
According to her, she could not sign off monies that she would find
difficult to explain to Nigerians later, urging the populace to rise up
and challenge the marketers.
While applauding some marketers that have demonstrated patriotic
disposition to this current crisis, the minister noted that many
marketers had resorted to black market operations and had kept on
fleecing Nigerians and smiling to the bank.
The minister, who said she had no regrets serving Nigeria, noted that it was a privilege serving one’s fatherland .
According to her, in spite of personal attacks on her from some
quarters, she has no regrets as her service to the country has been
guided by utmost patriotism and altruism.
She noted that the records of service were there for all to see, adding
that a 50 per cent fall in oil revenue did not amount to mismanagement
of the economy as this was not caused by the government.
The Jonathan administration, she said, was leaving “positive economic
legacies behind which nobody can wish away because history cannot be
rewritten”.
Such legacies, she said, include 1.4 million jobs created yearly out of
1.8 million jobs required as confirmed by the National Bureau of
Statistics; the Development Bank of Nigeria which she added, will make
affordable loans of up to 10 years available to Nigerian businesses. The
list, according to her include the Nigerian Mortgage Refinance Company
which is spearheading a range of reforms which will vastly increase the
number of mortgages in the country and 3600 Nigerians that were given
multi million naira grants to finance their business and the 22000
direct jobs created and over 80,000 indirect jobs thru YOUWIN, among
others.
Meanwhile, a former Minister of Defence, General Theophilous Danjuma
has tasked the President-elect General Muhammadu Buhari to probe
President Goodluck Jonathan and his administration's alleged gross
mismanagement of resources which he said has left the nation indebted to
the tune of over $60 billion.
Danjuma, who spoke in Takum, Taraba State during the official
commissioning of two set of bridges he constructed along Takum-Katsina
highway yesterday, said it has become imperative for the incoming
administration to probe the outgoing administration if the menace of
corruption would be curbed in the country.
Danjuma said, "It is disheartening to know that the incoming government
of Buhari will have to contend with a debt of over $60 billion and
there is nothing to show for this huge debt. Well, we would know what
happened to these monies because I believe that the Buhari
administration has to, and should, in national interest, investigate the
administration so that we would know what happened".
Giving reasons why he chose to not to participate in politics, Danjuma
stated that he chose to steer clear of politics because for him, "all
the political parties are the same, very bad and so I rather steer clear
of it. I support anyone who comes to me for money based on what I make
of their person irrespective of political affiliations."
Meanwhile, ahead of Friday’s transition to a new government, economic
analysts have stated that one of the major issues President-elect Buhari
and his team will grapple with is the mixed corporate earnings
performance of quoted companies and the conflicting macroeconomic
signals which leave investors at sea regarding market direction and
appropriate investment decisions.
After the breath-taking rally in the Nigerian financial market
post-2015 Presidential polls, markets recently bucked the trend, defying
analysts' expectation of a strong rebound post elections.
Data collated by the financial and investment advisory firm, Afrinvest,
at the weekend showed that the NSE All Share index, from a YTD high of
3.1 per cent (35,728.12) post presidential election closed the week on a
YTD return of -0.8 per cet (34,388.12).
The Afrinvest’s report noted that trading activities in the fixed
income space has followed a similar pattern, bucking a strong rally
post-elections - following renewed foreign investor appetite - to a
sideways trading pattern over the past weeks.
It said the development in the markets reflects the mixed corporate
earnings performance of quoted companies and the conflicting
macroeconomic signals which leave investors at sea regarding market
direction and appropriate investment decisions. Headwind factors of
rising consumer prices, fiscal austerity and consequent weaker consumer
spending powers, as well as uncertain fiscal direction of political
transition have veiled the improving dynamics in the polity and
commodity prices.
In its weekly report, a copy of which was made available to our
correspondent at the weekend, Afrinvest reports that the global monetary
landscape remains broadly accommodating while the domestic monetary
landscape has also recorded some gains with the naira remaining stable
while external reserves haemorrhage is being gradually contained.”
Analysts from the company expressed the confidence that economy would
bounce back once the incoming administration makes the direction of its
economic policy known as Nigerian and foreign investors are currently
adopting a wait-and-see attitude.
The report said, “We imagine that the modulation the markets await is a
successful transition to a new government come May 29th and more
importantly, a stable fiscal environment which is consequent on the
policy pronouncements of the incoming government. Whilst the risk
factors (headwinds) are evident, recent positive signals (tailwinds) as
noted above posit a short to medium term attractive valuations for
securities.”
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