FG’s domestic debt hits N8.39 trillion
There appears to be no quick end to the battered Nigerian economy as it was revealed yesterday that the Federal Government’s domestic debt profile has hit an unprecedented N8.396 trillion, even as external debts owed by states and Federal Government stood at $10.3 billion as at June, this year.
The disclosure was coming as the House Adhoc Committee on non- implementation of the capital expenditure for 2015, yesterday sought proper explanation on the country’s debt profile and the level of implementation of capital projects.
The House, had on Thursday, August 13, 2015, passed a resolution setting up the committee with the mandate to look into the non-implementation of capital provisions contained in the 2015 Appropriation Act.
The public hearing which was postponed twice due to the absence of the Permanent Secretary in the Federal Ministry of Finance, Mrs. Anastasia Nwaobi, finally held yesterday. At the hearing, the Director General of the Budget Office of the Federation, Alhaji Aliyu Yahaya Gusau, who represented Nwobia, rather than offer insight into the level of implementation of the 2015 budget, revealed that N882.1 was borrowed from domestic and external sources to fund the budget.
She said: “Public debt to the GDP ratio as at 2013 was 10.82%, and the total amount of N882.122 billion appropriated for domestic and external borrowing has been fully raised to finance the 2015
budget.
“Debt service to revenue ratio however, needs to be kept under close watch. Given that it was 19.63% by the end of June 2015; against the cognate arbitrary threshold of 28%.
“External debt as at June 30th 2015 stood at $7.74billion and $3.42billion for states and the FCT; bringing it to the total amount of $8.31billion”.
She further explained that the Nigerian economy was not immuned to the negative effects of falling oil prices as well as the ongoing currency depreciation in major world economies along with the fluctuating stock prices in China and Europe’s capital markets.
The Permanent Secretary noted that Nigeria, like other countries is experiencing a slow start to the fiscal year with growth forecast dropping to less than 3% of projected growth.
Nwaobia also explained the effect of JP Morgan’s decision to remove Nigeria from its emerging markets bond index, saying “the attempted delisting of Nigeria from the JP Morgan index watch has further heightened the fear of currency devaluation, import restriction and inflation”.
The disclosure was coming as the House Adhoc Committee on non- implementation of the capital expenditure for 2015, yesterday sought proper explanation on the country’s debt profile and the level of implementation of capital projects.
The House, had on Thursday, August 13, 2015, passed a resolution setting up the committee with the mandate to look into the non-implementation of capital provisions contained in the 2015 Appropriation Act.
The public hearing which was postponed twice due to the absence of the Permanent Secretary in the Federal Ministry of Finance, Mrs. Anastasia Nwaobi, finally held yesterday. At the hearing, the Director General of the Budget Office of the Federation, Alhaji Aliyu Yahaya Gusau, who represented Nwobia, rather than offer insight into the level of implementation of the 2015 budget, revealed that N882.1 was borrowed from domestic and external sources to fund the budget.
She said: “Public debt to the GDP ratio as at 2013 was 10.82%, and the total amount of N882.122 billion appropriated for domestic and external borrowing has been fully raised to finance the 2015
budget.
“Debt service to revenue ratio however, needs to be kept under close watch. Given that it was 19.63% by the end of June 2015; against the cognate arbitrary threshold of 28%.
“External debt as at June 30th 2015 stood at $7.74billion and $3.42billion for states and the FCT; bringing it to the total amount of $8.31billion”.
She further explained that the Nigerian economy was not immuned to the negative effects of falling oil prices as well as the ongoing currency depreciation in major world economies along with the fluctuating stock prices in China and Europe’s capital markets.
The Permanent Secretary noted that Nigeria, like other countries is experiencing a slow start to the fiscal year with growth forecast dropping to less than 3% of projected growth.
Nwaobia also explained the effect of JP Morgan’s decision to remove Nigeria from its emerging markets bond index, saying “the attempted delisting of Nigeria from the JP Morgan index watch has further heightened the fear of currency devaluation, import restriction and inflation”.
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