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Nigeria’s Debt Grows by N8tn in Two Years

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  • Nigeria’s Debt Grows by N8tn in Two Years

Nigeria’s total debt stock rose by N8tn between September 2015 and September 2017, according to statistics provided by the Debt Management Office.

The DMO said the country’s total debt stock as of the end of September this year stood at N20.37tn, while the figure at the same period in 2015 stood at N12.36tn.

This means that within a period of two years, the country’s total debt exposure rose by N8.1tn. In terms of percentage increase, the country’s total debt rose by 64.81 in the period.

The DMO did not give a breakdown of the federal and state governments’ components of the total debt commitment. However, the bulk of the debt usually belongs to the Federal Government.

As of 2015, the external loan component of the country’s total debt stood at N2.09tn. However, as of September 30, 2017, the external debt component stood at N4.60tn. This means that the external debt component rose by N2.6tn or 124.4 per cent.

The domestic debt component of the total debt, on the other hand, rose from N10.27tn as of September 2015 to N15.68tn the same time this year.

This means that within the two-year period, the domestic debt rose by N5.41tn. In percentage terms, the domestic debt increased by 52.68 per cent.

Although the external debt component of the total debt increased by a higher proportion, the debt statistics as of September 2017 show that the domestic debt, with its high cost of servicing, still dominates the country’s borrowing pattern.

However, the growth in the external debt component may reflect the Federal Government’s move to take more foreign loans as against the acquisition of more costly local debts.

The Federal Government is actually in a process of taking a $3bn foreign loan to refinance some local debts that are matured and another $2.5bn to finance the deficit in the 2017 budget.

In a statement issued by the DMO in Abuja on Tuesday, it said the Federal Government would save N91bn on local debt servicing if it secured the $3bn to refinance the local debts.

It added that the Federal Government would save another N75bn in debt servicing if it got $2.5bn from foreign sources to finance the gap in the 2017 budget rather than from local sources.

These add up to N166bn savings in debt servicing through external financing compared with local financing.

The statement also highlighted the marginal increase in the nation’s total debt portfolio when compared to the status as of June.

The statement read in part, “The total public debt stock, comprising the Federal Government, states and Federal Capital Territory’s, stood at N20.37tn as of September 30, showing a marginal increase of 3.6 per cent from the N19.634tn as of June 30.

“A breakdown of the debt stock shows that domestic debt accounted for 76.96 per cent, while external debt accounted for 23.04 per cent.

“Specifically, the domestic debt stock was N15.68tn, which is an increase of 4.1 per cent compared to N15.03tn as of June 30. On the other hand, the external debt stock stood at N4.69tn, a marginal rise of 1.9 per cent above the N4.6tn figure as of June 30.

“These debt data lend credence to the government’s claims that the public debt stock is skewed in favour of domestic debt, which is partly responsible for the high debt service figures.”

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

Economy

Gov Aiyedatiwa Signs ₦96 Billion Supplementary Budget Into Law, Hails Ondo House of Assembly For Swift Passage

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The Governor of Ondo State, Lucky Aiyedatiwa, has expressed gratitude to the State House of Assembly for the swift passage of the Supplementary Budget as he signs the ₦96 billion budget into law.

Governor Aiyedatiwa spoke on Tuesday, November 15, during the signing of the supplementary budget in Akure.

The governor explained that the supplementary budget is necessary to help his administration address the economic challenges in the state.

According to him, the new budget signed into law is also essential for the state government to implement the new ₦73,000 minimum wage for civil servants and new employees, as well as for the recruitment of workers in the state.

Aiyedatiwa said, “The supplementary budget is necessary because of the time we are in and the trends of what is happening in the state and country in general; the new minimum wage, subsidy removal, and the recent recruitment of workers.”

Aiyedatiwa stated that his administration was grateful to the leadership and members of the House of Assembly for passing the bill.

He highlighted the harmonious relations between the two arms of the state and reaffirmed that his administration will continue to work with the House of Assembly for the betterment of the Ondo people.

The Speaker of the House of Assembly, Olamide Oladiji, thanked the Governor, stating that the steps taken by his administration have not only transformed the state but also proven the governor’s ability and capacity to deliver on the job ahead.

He expressed optimism that the bill signed into law would positively impact the lives of the citizens.

“These giant strides have not only transformed the state in all facets but have clearly demonstrated your vision, capacity, intellectual ability, zeal, passion, direction, and a clear understanding of the enormous job ahead.

“It is therefore hoped that the implementation of these laws will meaningfully impact the lives of the good people of the state.”

Oladiji pledged the continuous support of the House to Aiyedatiwa’s administration, saying, “I want to, on behalf of my colleagues, assure you, Mr. Governor, of our continuous support and cooperation to ensure the success of this administration.”

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MEND Tackles Ex-Agitators For Threatening To Bomb Oil Installations In Rivers 

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A war of words has ensued between a militant group, the Movement for the Emancipation of the Niger Delta (MEND) and a coalition of ex-agitators over alleged plan to attack oil installations in the region by the latter group.

Following the political crisis rocking Rivers State, a coalition of ex-agitators and fighters in the region under the aegis of Niger Delta Development Force had last week threatened to blow-up oil facilities in the region over what it termed a plot to seize financial allocations meant for local government areas in Rivers State through the courts.

The former warlords dared the Federal Government and the Central Bank of Nigeria, saying if they proceeded in withholding the funds for the state, it would have grave consequences.

Kicking against the threat, MEND’s spokesman, Jomo Gbomo, in a statement on Friday, said it will support security operatives in safeguarding crude oil installations from any attack.

Gbomo also said MEND is not in support of the violence that Rivers State has been experiencing due to the lingering feud between the Minister of the Federal Capital Territory, Nyesom Wike, and his successor and estranged political godson, Siminalayi Fubara.

Describing the attack plan as threat to the economy of the country, Gbomo said it would be most unfortunate for a political dispute between two politicians to cost the state and Nigeria assets that are pivotal to nation’s survival.

Noting that the both feuding political gladiators are sons of the Niger Delta, the spokesman asked those making the threats not to allow themselves be tricked using the present circumstance into carrying arms against the Nigerian state on behalf of any of them, not even for any price.

He said as an Ijaw son, he knows the gains of having an Ijaw man as governor in Rivers, adding that it is an achievement which would not have been possible but for the collaboration of other ethnic groups.

According to him, the current healthy collaboration from the various ethnic groups which produced an Ijaw son as governor was spearheaded by the FCT Minister.

The statement said not only would MEND back the Federal Government in protecting oil facilities, but it would also ensure that the masterminds of the threats to attack oil installations are fished out and meant to face justice.

The MEND spokesman, however, urged the elders and traditional institutions in the region to intervene in the face-off between Governor Fubara and the FCT Minister.

He also urged parties in the festering political crisis to seek judicial redress if peaceful dialogue fails.

 

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Economy

Northern Governors Oppose New VAT Model as FG Defends Tax Reform Bills

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The Federal Government has addressed concerns raised by the Northern Governors’ Forum regarding the proposed tax reform bills before the National Assembly.

Investors King gathered that Governors of 19 Northern States of Nigeria, under the platform of the Northern Governors’ Forum met with the traditional rulers from the region to agree to disagree with the Federal Government’s new value-added tax model.

In a communiqué read by the chairman of the forum, Governor Muhammed Yahaya of Gombe State, the governors strongly opposed the new derivation-based model for Value-Added Tax (VAT) distribution in the new tax reform bills proposed by President Tinubu’s government.

Addressing the governors’ concern, the FG in a statement on Thursday by the President’s Special Adviser on Information and Strategy, Bayo Onanuga stated that the proposed bills will streamline Nigeria’s tax administration processes, enhance efficiency and eliminate redundancies across the country’s tax operations.

According to Onanuga, the bills which is currently before the National Assembly for consideration emerged after extensive review of existing tax laws.

The statement reads, “While we commend the Governors and traditional rulers for supporting President Bola Tinubu over the success recorded in addressing the country’s security challenges, we consider it necessary to address the misunderstandings and misgivings around the tax reform already embarked upon by the administration.

“President Tinubu and the Federal Executive Council recently endorsed new policy initiatives aimed at streamlining Nigeria’s tax administration processes, enhancing efficiency and eliminating redundancies across the nation’s tax operations.

“These reforms emerged after an extensive review of existing tax laws. The National Assembly is considering four executive bills designed to transform and modernise Nigeria’s tax landscape.

“First is the Nigeria Tax Bill, which aims to eliminate unintended multiple taxation and make Nigeria’s economy more competitive by simplifying tax obligations for businesses and individuals nationwide.

“Second, the Nigeria Tax Administration Bill (NTAB) proposes new rules governing the administration of all taxes in the country. Its objective is to harmonise tax administrative processes across federal, state and local jurisdictions for ease of compliance for taxpayers in all parts of the country.

“Third, the Nigeria Revenue Service (Establishment) Bill seeks to rename the Federal Inland Revenue Service (FIRS) as the Nigeria Revenue Service (NRS) to better reflect the mandate of the Service as the revenue agency for the entire federation, not just the Federal Government.

“Fourth, the Joint Revenue Board Establishment Bill proposes the creation of a Joint Revenue Board to replace the Joint Tax Board, covering federal and all states’ tax authorities.

“The fourth bill also suggests establishing the Office of Tax Ombudsman under the Joint Revenue Board, which would serve as a complaint resolution body for taxpayers.

“It is instructive to note that these proposed laws will not increase the number of taxes currently in operation. Instead, they are designed to optimise and simplify existing tax frameworks.

“The tax rates or percentages will remain the same under these reforms, as they focus on ensuring a more equitable distribution of tax obligations without adding to the burden on Nigerians.

“The reforms will not lead to job losses. On the contrary, they are structured to stimulate new avenues for job creation by supporting a dynamic, growth-oriented economy.

“Importantly, these laws will not absorb or eliminate the duties of any existing department, agency, or ministry. Instead, they aim to harmonise revenue collection and administration across the federation to ensure efficiency and cooperation.

“At the moment, tax administration lacks coordination among federal, state, and local tax authorities, often resulting in overlapping responsibilities, confusion, and inefficiency. Without reform, this inefficiency will persist.

“The proposed laws aim to coordinate efforts between different tiers of government, resulting in better tax resource management and greater clarity for taxpayers.

“Under existing laws, taxes like Company Income Tax (CIT), Personal Income Tax (PIT), Capital Gains Tax (CGT), Petroleum Profits Tax (PPT), Tertiary Education Tax (TET), Value-Added Tax (VAT), and other taxing provisions in numerous laws are administered separately, with individual legislative frameworks.

“The proposed reforms seek to consolidate these multiple taxes, integrating CIT, PIT, CGT, VAT, PPT, and excise duties into a unified structure to reduce administrative fragmentation.

“On the proposed derivation-based VAT distribution model, which the Northern Governors oppose, it must be stressed that the new proposal, as enunciated in the Bill, is designed to create a fairer system.

“The current model for distributing VAT is based on where the tax is remitted rather than where goods and services are supplied or consumed. The ongoing tax reform seeks to correct the inherent inequity in the current derivation model as a basis for distributing VAT revenue.

“The new proposal before the National Assembly outlines a different form of derivation which considers the place of supply or consumption for relevant goods and services. This means that states in the Northern region that produce the food we eat should not lose out just because their products are VAT-exempt or consumed in other states.

“These reforms are critical to improving the lives of Nigerians and were not put forward by President Tinubu to undermine any part of the country. There is no better time than now for the National Assembly to give due consideration to these bills that will overhaul our tax systems and create the revenue all the tiers of government require to fund the development our country and people urgently need.”

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