Federal Government at the weekend made public Nigeria’s debt stock, which put a lie to the allegations by the Vice President-elect, Prof. Yemi Osinbajo, that the Goodluck Jonathan administration incurred $60billion debt during his tenure.
Yemi-Osibajo1bThe government put the total debt stock at $63.7 billion (domestic and external), owed by both the federal and state governments.
The country’s debt stock, it explained, was accumulated over a long time by several administrations and not only the Jonathan government.
Osinbajo had claimed that the incoming Muhammadu Buhari government would inherit a total debt stock of $60 billion.
Stating the government’s position on the issue, the Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala, in an interactive session with finance correspondents in Abuja over the weekend, pointed out that contrary to recent negative statements about the economy, the Jonathan administration “is leaving positive economic legacies behind which nobody can wish away because history cannot be rewritten.”
Okonjo-Iweala said that it is wrong “to characterise the Jonathan administration as leaving $63 billion debt” because the country’s debt stock was accumulated over a long time by several administrations.
According to her, the country’s current debt goes as far back as 1960 and that it includes Federal Government debt as well as states, stressing that before the oil price drop, the federal government had reduced the annual rate of borrowing.
Explaining how the Nigeria’s debt got to the current level, the minister said that the country’s domestic debt increased by $18billion between 2010 and now, mainly because of the 53percent increase in the pay of civil and public servants.
In her breakdown of debt stock, she said of the $63billion, $9.7billion is external; representing 15 percent, while domestic is $54.61billion representing 85percent.
It is pertinent to note that 20 percent of the domestic debt stock belongs to states while 80 percent belongs to the federal government.
Of the domestic debt figure, she said $11.57billion was outstanding in 2002 while $17.3billion was accumulated between 2005 and 2011.
The minister pointed out that $18.1 billion was accumulated between 2012 and 2015, adding that Nigeria has one of the least Gross Domestic Product, GDP figures to debt stock.
“All the borrowings (external) were borrowed under concessionary terms with long moratorium payments and these date back to 1960; so no $60billion is accumulated by this administration. In fact, this government retired N75billion bond maturity for the first time in this country.
“There was 53 percent increase in salary in 2010 and government had to weather such an increment which the money was not there and they had to borrow to make up the salary increment. To characterise this administration as leaving $60billion debt is not correct,” she said.
It will be recalled that at the time of the wage hike under the late President Yar’Adua’s government, the minister was Managing Director of the World Bank.
Okonjo-Iweala noted that the government had in fact done a good job in managing the country’s debt profile by being the first administration in the history of the country to setup a sinking fund to retire bonds which had fallen due. N75billion worth of bonds were disposed of through this strategy.
She said though Nigeria has one of the world’s lowest debt-to-GDP ratios, the government has been careful in its borrowing.
The government, she averred, has used the right tools to manage the economy and has only borrowed at very low concessionary rates to fund important infrastructural initiatives in agriculture, power, roads, health, water resources and provision of infrastructure.
Okonjo-Iweala further stated that the year 2015 is difficult, largely because of the over 50 percent fall in global oil prices.
According to her: “Nigerians will remember in history that the difficulty of 2015 is because of the 50% fall in oil prices.”
She pointed out that she had told the nation as far back as December 2014 that this year will be difficult and outlined austerity measures, noting that “all possible scenarios had been anticipated in the 2015 Budget.
“What the world is looking at is how Nigeria has been managing the situation and their assessment is that we have done an excellent job compared to the other seven countries,” said the Finance Minister.
On the biting fuel scarcity in the country, she said oil marketers were not sincere about their demand.
Okonjo-Iweala stressed that there was a lot of manipulation and scam in oil marketers’ businesses, adding that, they had been paid over N500 billion between December and now yet marketers chose to hold the country and its citizen to ransom.
“Two weeks ago, they got paid N154billion and they came back to say government still owes them N200 billion. They are asking for exchange differential of N159billion and they wanted me to sign that and I said I can’t just sign away Nigerians’ money of N159billion.
“There has been manipulations and scam in oil marketing. A committee was setup to verify the N159billion and after we had met and resolved it, they did the opposite. Only a few oil marketers supplied fuel and they just want to make Nigerians suffer. Nigerians should not be blackmailed, they should rise up,” she stated.
While admitting that the last one year had been very challenging due to the drop in revenue stream occasioned by global challenge in oil market, the minister said a lot of achievements were recorded by the outgoing administration in many areas.