27th November, 2014
The debt profile of Nigeria is beginning to reach an alarming height, throwing up discomfort among the citizens of the country and making us wonder if Dr. Ngozi Okonjo-Iweala, the country’s Minister of Finance and Coordinating Minister of the Economy, actually intends to put Nigeria, her own country, in a perpetually sick state.
Considering the role she played in the widely celebrated debt cancellation during the administration of former President Olusegun Obasanjo, why is Okonjo-Iweala, an expert and World Bank acclaimed professional, allowing the Nigerian economy crash before her very eyes?
Nigeria’s debt profile, according to recent reports emanating from the country’s Debt Management Office in Abuja, now stands at N10.84 trillion as at 30 September, showing a N2.52 trillion or 30.29 percent rise in the last one year between 30 September, 2013 and 30 September, 2014. The reports also put external debts of both the federal and state governments at $9.52 billion or N1.48 trillion.
While the domestic debt profile of the Federal Government alone was $49.12 billion or N7.65 trillion as at 30 September, 2014, that of the states was put at $10.97 billion or N1.71 trillion. The Federal Government’s domestic debt was further broken into Bond constituting N4.6 trillion which makes up 60.12 percent of the total domestic debt, Treasury Bills of N2.74 trillion making up 35.76 percent of the domestic debt and Treasury Bonds which amounts to N315.39 billion or 4.12 percent.
For the states, Lagos owes $1.02bn, Kaduna owes $245.51 million, Cross River owes $120.21 million, Ogun owes $116.69 million, Bauchi owes $111.61 million, Oyo owes $80.11 million, Borno owes $16.07 million, Plateau owes $22.99 million, Taraba owes $24.06 million, Benue, $28.79m while Delta owes $24.7 million.
To better understand the consequences of this on the country, the government spent N591.76 billion servicing the debt in 2013. In 2014, N712 billion will be spent on debt servicing, in 2015, the amount that will be spent on servicing debt is N684bn, while N684bn would be used to service the country’s debt in 2016.
Nothing is wrong with borrowing. Many nations of the world engage in borrowing to keep their countries running, but we are disturbed when a country like Nigeria, with so much resources, goes cap-in-hand begging for loan anytime it wants to embark on any project. What then has happened to the internally generated revenue of the government? What about the millions of barrels of crude oil exported daily from the country? The Federal Inland Revenue Service boasts of upping the country’s revenue everytime, sometimes, almost meeting the budget estimate for the year, the Nigerian Customs Service and other parastatals rake in billions for the government annually, yet borrowing has become second nature simply because of mismanagement and massive corruption.
Since revenue accruing from oil has depleted, the Nigerian government has been going about preaching diversification as if it just realised the need for such idea. The country’s dismal economic situation appears to have already overwhelmed the government because it woke up too late from its slumber. This is what Okonjo-Iweala’s economic pontification has produced. And as the value of the naira keeps crashing every day, the future of the nation’s economy may remain bleak for a long time, not withstanding the austerity measures the government has introduced because the measures are coming too little, too late.