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Nigeria’s Debt, Personnel Gulp N6.46 Trillion in Cost in 2020 -Finance Minister

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Zainab Ahmed Finance Minister

Nigeria’s Debt, Personnel Gulp N6.46 Trillion in Cost in 2020 -Finance Minister

The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, has said Nigeria spent a total of N6.46 trillion on both debt servicing and personnel in 2020.

The Minister disclosed this while virtually presenting the 2021 Federal Government approved budget.

Providing clarification on 2020 expenditure, she said N3.27 trillion was spent on debt servicing while N3.19 trillion was spent on personnel cost, including pensions.

She said “Of the expenditure, N3.27tn was for debt service and N3.19tn for personnel cost, including pensions.

“As at year end 2020, N1.80tn had been released for capital expenditure, that is, about 89 per cent of the provision for capital.”

She further stated that the nation’s economy is becoming less dependent on crude oil as the contribution from the oil sector only accounts for 30 percent of the 2021 funding.

Ahmed explained that 70 percent of the funding for the 2021 budget would coming from the non-oil sector.

Ahmed said, “In aggregate, 30 per cent of projected revenues is to come from oil-related sources, while 70 per cent is to be earned from non-oil sources.

“This, therefore, shows that the Nigerian economy is gradually becoming less dependent on oil. Overall, the size of the budget has been constrained by our relatively low revenues.”

She puts Nigeria’s total budget deficit at N5.6 trillion in 2021, accounting for 3.39 percent of the nation’s total Gross Domestic Product (GDP).

According to Ahmed, the budget deficit would be financed mainly by borrowings as N2.34 trillion would be borrowed from domestic and foreign sources each, N709.69 billion from multilateral and bilateral loan drawdowns, while privatisation proceeds would provide N205.15 billion.

Ahmed said, “Recurrent (non-debt) spending, estimated to amount to N5.99tn, is 44.1 per cent of total expenditure, and 13.3 per cent higher than 2020 revised estimates (mainly reflecting increases in salaries and pensions).

“Aggregate capital expenditure of N4.37tn is 32.2 per cent of total expenditure; and 62.9 per cent higher than the 2020 revised budget (inclusive of capital component of statutory transfers, GOEs capital and project-tied loans expenditures).”

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

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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.

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Economy

FG to Partly Fund Six Rail Projects Connecting All Regions

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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.”

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Economy

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

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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.

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