The Federal Government’s expenditure on debt financing rose to $854.36 million in May alone, according to data released by the Central Bank of Nigeria (CBN).

This figure marks the highest single-month spending on debt servicing recorded in the past year, raising alarms about the sustainability of the country’s borrowing practices.

The data from the CBN’s International Payments Report revealed a sharp escalation in debt servicing expenditure, with May’s figure representing a significant surge compared to previous months.

The $854.36 million spent in May is nearly four times higher than the amount disbursed for debt servicing in April and reflects a 286.49% increase from the same period in 2023.

The exponential rise in debt financing expenditure comes despite the Nigerian government’s claims of shifting its borrowing focus towards the domestic market.

Such a substantial outlay on debt servicing raises questions about the government’s ability to manage its fiscal responsibilities while maintaining economic stability and growth.

Analysts have voiced concerns over Nigeria’s increasing reliance on external borrowing, which poses risks to the country’s long-term financial health.

Fitch Ratings previously projected Nigeria’s external debt servicing to escalate to $5.2 billion next year, highlighting the urgency for prudent financial management and strategic debt reduction measures.

The Federal Government’s mounting debt burden has prompted calls for transparency and accountability in fiscal policies.

Stakeholders emphasize the need for effective debt management strategies to mitigate the adverse effects of escalating debt levels on the economy.

Despite assurances from government officials regarding plans to raise additional funds from concessional lenders and international financial institutions, including the World Bank, concerns persist over the sustainability of Nigeria’s borrowing trajectory.

The recent announcement by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, regarding an impending $2.25 billion World Bank package underscores the government’s reliance on external financing to meet its financial obligations.

As Nigeria grapples with the economic challenges exacerbated by the COVID-19 pandemic and fluctuating global oil prices, achieving fiscal stability remains paramount.

Efforts to diversify revenue sources, enhance transparency in public expenditure, and implement prudent debt management practices are crucial for safeguarding Nigeria’s financial future and fostering sustainable economic growth.

Retail lender, Unity Bank Plc has projected a Profit After Tax of N5.2 billion in Q3, 2024, according to its latest earning forecast released to the Nigerian Exchange Group.

The lender projects a pre-tax profit of N5.7 billion while targeting a turnover of N26.93 billion in gross earnings during the quarter, an 8.2% increase from the Q2, 2024 projection of N24.89 billion.

An essential part of the earnings forecast also shows that the lender expects to record its interest income at N23 billion, with net revenue anticipated to hit N6.58 billion for the period.

Operating income is expected to rise to N13.38 billion, while cash flow from financing activities is projected to rise to N353.6 billion.

Moreover, the improved projected cash from financing activities and the expected increase in cash and cash equivalents highlight the lender’s strong liquidity position, which is critical for sustaining current and future business operations.

The lender stated that it expects the results to be achieved and surpass the projection, barring any unforeseen significant changes in the operating macroeconomic environment under which assumptions underlying the forecast were made.

Analysts believe that the positive outlook of the lender’s Q3, 2024 earnings forecast reflects strategic growth in key financial metrics, a focus on strengthening its income base, efficient financial management, and enhancing customer deposits geared towards maintaining a strong, stable, and profitable financial institution.

A forensic audit conducted by global accounting firm KPMG has uncovered a N3.3 trillion discrepancy in the fuel subsidy claims made by the Nigerian National Petroleum Company Limited (NNPCL) during the administration of former President Muhammadu Buhari.

The audit, which meticulously examined the subsidy claims, found that NNPCL had significantly inflated its figures, initially reporting N6 trillion, with the government having already paid a substantial portion of this amount.

The audit’s findings come as a blow to the credibility of NNPCL’s financial practices.

According to the report, the discrepancy suggests gross mismanagement or potential fraud within the fuel subsidy scheme, raising serious questions about the accountability and transparency of NNPCL’s operations.

Mele Kyari, NNPCL’s Group CEO, defended the company’s position, stating that despite the government’s provision of N6 trillion in 2022 and N3.7 trillion in 2023, NNPCL has not received any reimbursement.

“Since the provision of the N6tn in 2022, and N3.7tn in 2023, we have not received any payment whatsoever from the Federation. That means they (the Federal Government) are unable to pay, and we’ve continued to support this subsidy from the cash flow of the NNPC. We are waiting for them to settle up to N2.8tn of NNPC’s cash flow from the subsidy regime, and we can’t continue to build this,” Kyari said.

Kyari’s remarks came just hours after President Bola Tinubu announced the removal of the fuel subsidy, a move aimed at addressing the economic strain caused by the subsidy payments.

Following the announcement, the federal government has decided to initiate a fresh audit to verify the authenticity of NNPC’s claims.

This new audit, which will cover the period from 2015 to 2021, aims to further scrutinize NNPC’s financial records and prevent future discrepancies.

The Office of the Auditor-General for the Federation (OAuGF) will spearhead this new audit, with potential support from an external firm to ensure impartiality and thoroughness.

This decision was made during a Federal Account Allocation Committee (FAAC) meeting in March 2024, where members underscored the need for an independent audit to avoid conflicts of interest and ensure a transparent review process.

The KPMG audit’s findings have sparked widespread calls for accountability and reform within NNPCL.

Analysts suggest that these revelations could lead to significant changes in the management and oversight of Nigeria’s fuel subsidy program, potentially involving legal actions against those found responsible for the discrepancies.