Connect with us

Economy

Experts Worry as Debt Profile Rises by 127% Under Buhari

Published

on

President Muhammadu Buhari

Experts Worry as Nigeria’s Debt Rose by 127% Under Buhari

Rising debt profile remains an issue in Nigeria, an economy with one of the world’s lowest revenue generation and that depends largely on crude oil.

Experts have said Nigeria’s rising debt profile will continue to weigh on the nation’s growth and ability to improve economic productivity, especially with debt service to revenue ratio presently at 99 percent.

In a recent interview, Dr. Muda Yusuf, the Director-General of Lagos Chamber of Commerce and Industry, said the rising national debt was a cause for concern.

Debt profile rose by 127 percent from to N28.6 trillion in March 2020, up from N12.6 trillion in 2015 when President Muhammadu Buhari became president.

Yusuf said, “The capacity to service the current stock of debt raises serious sustainability concerns.

“For instance, the debt service provision in the 2019 budget was a whooping N2tn whereas the total capital budget was N2.9tn. This implies that the debt service commitment was 70 per cent of capital budget allocation.

“Only recently, the National Assembly approved the revised 2020 budget of N10.8tn.

“The recurrent component was N4.9tn, which is 45.4 per cent. The capital component was N2.49tn, which is 23 per cent of the budget.”

“The debt service component is N2.95tn, which is 27.3 per cent.

“It follows that the sum of the recurrent provision and the debt service provision represent 73 per cent of the budget.

“It also implies that the debt service is 118 per cent of the capital budget provision.

“This percentage would be higher if we reckon with actual figures at the close of the budget year.”

Another expert, Dr. Sam Nzekwe, a former President, Association of National Accountants of Nigeria, explained that around a quarter of Nigeria’s yearly budget goes to debt servicing.

He further stated that while borrowing is not bad, it is important to deploy the fund judiciously.

He said, “Borrowing is not bad in the real sense of it, but what have you done with the money?

“Have you borrowed for recurrent expenditure or to finance capital project? If they are borrowing to finance recurrent expenditure, it is bad.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Egypt Leads Nigeria, South Africa in Foreign Direct Investment

Published

on

Global debt

Egypt Leads Nigeria, South Africa in Foreign Direct Investment

The United Nations Trade Association has Nigeria recorded a total of $2.6 billion in Foreign Direct Investment (FDI) in 2020, below the $3.3 billion posted in the preceeding year.

South Africa, Africa’s most industrialised nation, reported $2.5 billion during the same year, slightly below Africa’s largest economy and 50 percent below the $4.6 billion attracted a year earlier.

The report also noted that Africa recorded a total of $38 billion FDI in the same year, representing a 18 percent decline from the $46 billion posted in the corresponding year of 2019.

However, Egypt led Nigeria and South Africa with $5.5 billion FDI, an increase of 38 percent from the preceeding year.

The report read in part, “FDI flows to Africa declined by 18% to an estimated $38 billion, from $46 billion in 2019. Greenfield project announcements, an indication of future FDI trends, fell 63% to $28 billion, from $77 billion in 2019. The pandemic’s negative impact on FDI was amplified by low prices of and low demand for commodities.

UNCTAD also noted that global foreign direct investment declined by 42 percent to an estimated $859 billion, down from $1.5 trillion in 2019.

The decline was concentrated in developed countries, where FDI flows fell by 69 percent to an estimated $229 billion. Flows to Europe dried up completely to -4 billion (including large negative flows in several countries). A sharp decrease was also recorded in the United States (-49%) to $134 billion.

Continue Reading

Economy

FG to Partly Fund Six Rail Projects Connecting All Regions

Published

on

rail project

FG to Partly Fund Six Rail Projects Connecting All Regions

The Federal Government will pay a total sum of N71 billion to partly fund six rail projects connecting all regions of the country.

In the report obtained from the Federal Ministry of Finance, Budget and National Planning, the six rail projects marked for development this year are Lagos-Kano rail line (ongoing), Calabar-Lagos (ongoing), and Ajaokuta-Itakpe-Aladja (Warri).

Others are the Port Harcourt-Maiduguri railway, the new Kano-Katsina-Jibiya-Maradi line in Niger Republic and the Abuja-Itakpe and Aladja-Warri Port and refinery/Warri new harbour.

The Buhari administration will also spend N15.1 billion on the development of safety and security of critical projects, airport certification, runway construction, terminal building, among others in the aviation sector in 2021.

Last week, Rotimi Amaechi, Minister of Transportation, said the Lagos-Kano line would be connected from the Ibadan end of the Lagos-Ibadan railway and would cost $5.3 billion.

We are waiting for the Chinese government and bank to approve the $5.3bn to construct the Ibadan-Kano. What was approved a year ago was the contract,” the minister said.

He added, “The moment I announced that the Federal Government had awarded a contract of $5.3bn to CCECC (China Civil Engineering and Construction Corporation) to construct Ibadan-Kano, people assumed the money had come in; no.

“We have not got the money, which is a year after we applied for the loan. We have almost finished the one of Lagos-Ibadan. If we don’t get the loan now, we can’t commence.”

Continue Reading

Economy

FG Launches E-ticketing Platform to Deepen Train Usage and Convenience

Published

on

FG Launches E-ticketing Platform to Deepen Train Usage and Convenience

In a bid to improve the usage and enhance the convenience of train transport in Nigeria, the Federal Government on Thursday announced the launching of the Electronic Ticketing platform for the Kaduna-Abuja rail services.

The N900 million E-ticketing platform was introduced by the Minister of Transportation, Chibuike R. Amaechi, and the Nigerian Railway Corporation.

Amaechi said the new platform would improve efficiency, promote accountability, reduce leakage and enhance economic growth, as well as save time.

The E-ticketing platform was a Public-Private Partnership project done in conjunction with Secure ID Solutions, who provide and would manage the system for 10 years in an effort to recoup its investment before the Nigerian Railway Corporation take charge.

Kofo Akinkugbe, the Chief Executive Officer, Secure ID Solutions, said as the new E-platform issued 25,000 tickets after a successful pilot test on Thursday.

Potential Travelers can book via three ways:

1. Mobile app
2. Website
3. POS or Cash at the station

A validator would be used to scan the ticket barcode to ascertain its authenticity before boarding.

Amaechi further announced that self-service ticket vending machines at various train stations would be introduced soon.

Continue Reading

Trending