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Domestic Debt Servicing Gulped N2.95tn in Five Years

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Buhari

The Federal Government spent a total of N2.95tn to service domestic debts for a period of five years from 2010 to 2014, investigation has shown.

Statistics obtained from the Debt Management Office in Abuja on Thursday showed that the actual amount spent on servicing the domestic component of the country’s total debt rose from N334.66bn in 2010 to N846.64bn by the end of December 2014. The amount spent on domestic debt in 2015 is not yet available.

Each year, the Federal Government sets apart funds in the budget for the servicing of both foreign and domestic debts. The actual amount paid, however, may differ from what is budgeted.

The debt service obligation of the Federal Government showed an increase of N511.98bn within the period of five years. This means that in the period, the country’s domestic debt service obligation rose by 152.99 per cent.

The increase also reflected the rise in the size of the country’s domestic debt portfolio from N4.55tn in December 2010 to N7.9tn on December 31, 2014, a difference of 73.63 per cent.

This means that while the domestic debt component rose by 73.63 per cent within the period, the cost of servicing it also increased by 152.99 per cent. However, some of the debts that had fallen due within the period might have been liquidated.

As of December 31, 2010, the domestic debt of the Federal Government was classified as FGN Bonds, N2.9tn; Nigerian Treasury bills, N1.28tn; treasury bonds, N372.9bn; and development stocks, N220m.

However, by December 31, 2014; the FGN Bonds accounted for N4.79tn; Nigeria Treasury bills, N2.82tn; and treasury bonds, N296.22bn. The development stock had been phased out by then.

In terms of interest payment in 2014, the government paid N511.78bn on FGN Bonds; Nigeria Treasury bills, N300.27bn; and treasury bonds, N34.59bn.

The previous year, FGN Bonds accounted for N464.67bn of the total interest payment; Nigeria Treasury bills, N293.88bn; while treasury bonds accounted for N35.55bn. The total interest paid on domestic debt for the year was N794.1bn.

In 2012, with a total domestic debt service obligation of N701.38bn, FGN Bonds accounted for N354.08bn; Nigeria Treasury bills, N310.79bn; and treasury bonds, N36.5bn.

For 2011, the interest paid on domestic debt amounted to N518bn, with the FGN Bonds accounting for N293.79bn; Nigeria Treasury bills, N186.72bn; and treasury bonds, N37.47bn.

The interest payment for 2010 showed that FGN Bonds gulped N231.11bn; Nigeria Treasury bills, N65.07bn; while N38.43bn was paid as interest on treasury bonds.

Within the period, some domestic debts that were due for payment were either redeemed or refinanced. For instance, in 2014, treasury bonds amounting to N865.81bn were redeemed, while in 2013, N94.17bn of domestic debt was redeemed.

In the previous year (2012), a total of N456bn of domestic debt was refinanced. In 2011, N223.67bn of the domestic debt was refinanced, just as N317.76bn was refinanced in 2010. Debt redemption means that the principal sum of a debt that is due is paid off, while refinancing means that a fresh loan is taken to pay off a debt that is due.

The interest payment in 2014 as a percentage of the total domestic debt showed that the average cost or interest on the domestic debt for the year stood at 10.71 per cent. In 2010, the rate stood at 7.35 per cent.

Generally, the nation’s domestic debt market has been very active and the rates are regarded as attractive. For this reason and because of the safety of the government’s debt instruments, a number of investors, including Pension Fund Administrators, have been very active in the market.

The PUNCH had exclusively reported on July 27, 2015 that the country’s total debt stock stood at N12.12tn as of June 30, 2015, with the domestic debt of the Federal Government accounting for N8.39tn.

For 2016, the Federal Government expects to borrow N984bn from domestic sources and N900bn from foreign sources to finance the capital component of the budget.

It has also set aside the sum of N113bn as a sinking fund for the retirement of maturing loans, while N1.36tn has been proposed for foreign and domestic debt service obligations.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Government

EFCC Declares Former Kogi Governor, Yahaya Bello, Wanted Over N80.2 Billion Money Laundering Allegations

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Yahaya Bello

The Economic and Financial Crimes Commission (EFCC) has escalated its pursuit of justice by declaring former Kogi State Governor, Yahaya Bello, wanted over alleged money laundering amounting to N80.2 billion.

In a first-of-its-kind action, the EFCC announced Bello’s wanted status in connection with the alleged embezzlement of funds during his tenure as governor.

The commission, armed with a 19-count criminal charge, accused Bello and his cohorts of conspiring to launder the hefty sum, which was purportedly diverted from state coffers for personal gain.

The declaration of Bello as a wanted fugitive came after a series of failed attempts by the EFCC to effect his arrest.

Despite an ex-parte order from Justice Emeka Nwite of the Federal High Court, Abuja, mandating the EFCC to apprehend and produce Bello in court for arraignment, the former governor managed to evade capture with the reported assistance of his successor, Governor Usman Ododo.

This latest development shows the challenges faced by law enforcement agencies in holding powerful individuals accountable for their actions.

However, it also demonstrates the unwavering commitment of the EFCC to uphold the rule of law and ensure that justice is served, irrespective of the status or influence of the accused.

In response to the EFCC’s declaration, the Attorney General of the Federation and Minister of Justice, Lateef Fagbemi, issued a stern warning to Bello, stating that fleeing from the law would not resolve the allegations against him.

Fagbemi urged Bello to honor the EFCC’s invitation and cooperate with the investigation process, saying it is important to uphold the rule of law and respect the authority of law enforcement agencies.

The EFCC’s pursuit of Bello underscores the agency’s mandate to combat corruption and financial crimes, sending a strong message that individuals implicated in corrupt practices will be held accountable for their actions.

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Concerns Mount Over Security as National Identity Card Issuance Shifts to Banks

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NIMC enrolment

Amidst the National Identity Management Commission’s (NIMC) recent announcement that the issuance of the proposed new national identity card will be facilitated through applicants’ respective banks, concerns are escalating regarding the security implications of involving financial institutions in the distribution process.

The federal government, in collaboration with the Central Bank of Nigeria (CBN) and the Nigeria Inter-bank Settlement System (NIBSS), introduced a new identity card with payment functionality, aimed at streamlining access to social and financial services.

However, the decision to utilize banks as distribution channels has sparked apprehension among industry stakeholders.

Mr. Kayode Adegoke, Head of Corporate Communications at NIMC, clarified that applicants would request the card by providing their National Identification Number (NIN) through various channels, including online portals, NIMC offices, or their respective banks.

Adegoke emphasized that the new National ID Card would serve as a single, multipurpose card, encompassing payment functionality, government services, and travel documentation.

Despite NIMC’s assurances, concerns have been raised regarding the necessity and security implications of introducing a new identity card system when an operational one already exists.

Chief Deolu Ogunbanjo, President of the National Association of Telecoms Subscribers, questioned the rationale behind the new General Multipurpose Card (GMPC), citing NIMC’s existing mandate to issue such cards under Act No. 23 of 2007.

Ogunbanjo highlighted the successful implementation of MobileID by NIMC, which has provided identity verification for over 15 million individuals.

He expressed apprehension about integrating the new ID card with existing MobileID systems and raised concerns about data privacy and unauthorized duplication of ID cards.

Moreover, stakeholders are seeking clarification on the responsibilities for card blocking, replacement, and delivery in case of loss or theft, given the involvement of multiple parties, including banks, in the issuance process.

The shift towards utilizing banks for identity card issuance raises fundamental questions about data security, privacy, and the integrity of the identification process.

With financial institutions playing a pivotal role in distributing sensitive government documents, there are valid concerns about potential vulnerabilities and risks associated with this approach.

As the debate surrounding the security implications of the new national identity card continues to intensify, stakeholders are calling for greater transparency, accountability, and collaboration between government agencies and financial institutions to address these concerns effectively.

The paramount importance of safeguarding citizens’ personal information and ensuring the integrity of the identity verification process cannot be overstated, especially in an era of increasing digital interconnectedness and heightened cybersecurity threats.

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Israeli President Declares Iran’s Actions a ‘Declaration of War’

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Israel Gaza

Israeli President Isaac Herzog has characterized the recent series of attacks from Iran as nothing short of a “declaration of war” against the State of Israel.

This proclamation comes amidst escalating tensions between the two nations, with Iran’s aggressive actions prompting serious concerns within Israel and the international community.

The sequence of events leading to Herzog’s grave assessment began with a barrage of 300 ballistic missiles and drones launched by Iran towards Israel over the weekend.

While the Israeli defense forces managed to intercept a significant portion of these projectiles, the sheer scale of the assault sent shockwaves through the region.

President Herzog’s assertion of war was underscored by Israel’s careful consideration of its response options and ongoing discussions with its global partners.

The gravity of the situation prompted the convening of the G7, where member nations reaffirmed their commitment to Israel’s security, recognizing the severity of Iran’s actions.

However, the United States, a key ally of Israel, took a nuanced stance. President Joe Biden conveyed to Israeli Prime Minister Benjamin Netanyahu that, given the limited casualties and damage resulting from the attacks, the US would not support retaliatory strikes against Iran.

This position, though strategic, reflects a delicate balancing act in maintaining stability in the volatile Middle East region.

Meanwhile, Russian Foreign Minister Sergei Lavrov and his Iranian counterpart Hossein Amir-Abdollahian cautioned against further escalation, emphasizing the potential for heightened tensions and provocative acts to exacerbate the situation.

In response to the escalating crisis, the Nigerian government issued a call for restraint, urging both Iran and Israel to prioritize peaceful resolution and diplomatic efforts to ease tensions.

This appeal reflects the broader international consensus on the need to prevent further escalation and mitigate the risk of a wider conflict in the Middle East.

As Israel grapples with the implications of Iran’s aggressive actions and weighs its response options, President Herzog reiterated Israel’s commitment to peace while emphasizing the need to defend its people.

Despite calls for restraint from global allies, Israel remains vigilant in safeguarding its security amidst the growing threat posed by Iran’s belligerent behavior.

The coming days are likely to be critical as Israel navigates the complexities of its response while international efforts intensify to defuse the escalating tensions between Iran and Israel.

The specter of war looms large, underscoring the urgency of diplomatic engagement and concerted efforts to prevent further escalation in the region.

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