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Domestic Debt Servicing Gulped N2.95tn in Five Years




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.

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


Sanwo-Olu Orders Full Reopening of Markets




Governor of Lagos State Orders Full Reopening of All Markets

Governor Sanwo-Olu of Lagos has ordered the full reopening of markets in the state after a report showed new cases of COVID-19 have subsided.

The governor ordered the full reopening of both the food markets and non-food markets across the metropolis.

Dr. Wale Ahmed, the Commissioner for Local Government and Community Affairs, disclosed this in a statement issued on Tuesday.

He said the governor took the decision to further deepen trade and commerce and ease the hardship of recent happenings.

It should be recalled that the markets were shut due to the outbreak of ravaging COVID-19 pandemic in March before they were partially reopened for activities in May.

The governor, however, urged all traders to observe all safety protocols in order to prevent a possible resurgence of COVID-19 in the state.

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Private Sector Coalition Against COVID-19 (CACOVID) Speaks on Looted Palliatives, Explains Delay



looted palliatives

Looted Palliatives: Private Sector Coalition Against COVID-19 (CACOVID) Speaks

Private Sector Coalition Against COVID-19 (CACOVID) has spoken on the recent actions of criminals and thugs who hijacked the #EndSARS protest and looted warehouses where COVID-19 palliatives were kept for distributions.

The group refuted claims that the stolen items were hoarded for certain people instead of distribution to the vulnerable they were meant for. This is despite the fact that some of the palliatives were already rotten by the time criminals broke into the warehouses.

Some of the looters, who spoke with the press, said a sizeable number of the items were already rotten and destroyed by rodents, while one of the lawmakers tasked with distribution claimed he planned to distribute the items on his birthday. A statement that angered many Nigerians.

However, in a statement issued on behalf of the group by Osita Nwanisobi, the Acting Director of Corporate Communications, CBN, on Monday, CACOVID said due to the huge size of the items meant to be distributed, the complex process involved in manufacturing, packaging and the eventual distribution to 2 million most vulnerable families across the 774 local government in the country, the group agreed to conduct the supply in stages, especially given locked down imposed by the Federal Government during the period.

The statement reads, “Members of the Private Sector-led Coalition Against COVID-19 (CACOVID) wish to call for calm, amidst the looting of COVID-19 palliatives meant for distribution in various State Government warehouses across the country.

“The Coalition is deeply concerned by the recent events and is urging those involved in the wanton destruction of public and private property to immediately desist from these raids, in order to allow the States to proceed with a peaceful and fair distribution of these palliatives to the neediest and most vulnerable in our society.

“Over the past few months, the private sector, through CACOVID has been working with governors, the FCT Minister, and the Nigerian Governors’ Forum (NGF) to procure, deliver, and distribute these food relief items to almost 2 million most vulnerable families (over 10 million Nigerians) across the 774 local government areas of the country, as part of the private sector’s support towards the national response to the COVID-19 pandemic.

“The sheer scale of this nationwide food programme and the timing of the orders and deliveries, which coincided with the lockdowns and reduced movement across the country, compelled CACOVID to roll out distribution in a staggered manner.

“The very large size of the order and the production cycle required to meet the demand caused delays in delivering the food items to the states in an expeditious manner; hence, the resultant delay in delivery of the food palliatives by the state governors.”

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Makinde Directs Schools to Reopen After #EndSARS Protest




Schools to Reopen After #EndSARS Protest, Says Governor Makinde

The Executive Governor of Oyo State, Seyi Makinde, has directed schools across the Ibadan metropolis to resume normal activities immediately after the #EndSARS protest.

Mr Olasunkanmi Olaleye, the commissioner for education, Oyo State, disclosed this in a statement issued on Sunday in Ibadan.

According to Olaleye, the directive was after a careful review of the situation in the Ibadan metropolis as promised by Governor Makinde in a state broadcast on October 20.

This was after the governor ordered the closure of all schools, private and public, in the Ibadan metropolis for three days and promised to review the situation on October 23.

Olaleye said the governor thanks the youths who have been cooperating with security operatives in the state to ensure peace and order.

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