Govt’s debts pro­file hits N20tr in Q3

The Guardian (Nigeria) - - FRONT PAGE - By Chi­jioke Nel­son

THE na­tion’s debt pro­file has again in­creased by about N740 bil­lion to N20.37 tril­lion, nearly three times the na­tional bud­get for 2017.

Fac­tor­ing the in­creased debt deals, the Fed­eral Gov­ern­ment, had last week in its pro­posed 2018 bud­get pre­sented to the Na­tional Assem­bly, es­ti­mated a N2.01 tril­lion debt ser­vice bill next year.

The cost of the bor­rowed funds is only about N400 bil­lion short of the pro­posed cap­i­tal vote for 2018 at N2.43 tril­lion and 30.4 per cent of the to­tal ex­pected earn­ings of the Fed­eral Gov­ern­ment put at N6.61 tril­lion in 2018. The de­vel­op­ment now con­firms the need for gov­ern­ment to in­crease its rev­enue sources and en­sure that all bor­rowed funds are ac­counted in the form of re­gen­er­a­tive projects as ad­vised by the In­ter­na­tional Mone­tary Fund (IMF). By the pro­vi­sional record of the Debt Man­age­ment Of­fice (DMO), the debt stock rose from N19.63 tril­lion ($64.19 bil­lion) as at June 30, 2017 to N20.37 tril­lion ($66.63) as at Septem­ber 30, 2017.

This shows an in­crease of N740­bil­lion in three months, aris­ing from new deals in ef­forts to over­come the left over of 2016 and cur­rent 2017 bud­gets’ deficits. The de­vel­op­ment also shows that the gains of Nige­ria ex­it­ing the Paris Club and the Bret­tons Wood in­sti­tu­tions debt un­der the for­mer Pres­i­dent Oluse­gun Obasanjo’s ad­min­is­tra­tion have been eroded and con­se­quently, the money needed for de­vel­op­ment projects are di­rected to­wards pay­ment of debts.

Of the debt pack­age, the Fed­eral Gov­ern­ment is ac­count­able for N17.19 tril­lion ($56.22 bil­lion), while states cu­mu­la­tively have N3.18 tril­lion ($10.4 bil­lion) in do­mes­tic deals.

The ex­ter­nal com­po­nents of the debt for both fed­eral and states amounted to N4.69 tril­lion ($15.35 bil­lion), while do­mes­tic deals con­tracted by Fed­eral gov­ern­ment is put at N12.49 tril­lion ($40.87 bil­lion).

Hit by dwin­dling oil rev­enues, the gov­ern­ment has re­sorted to bor­row­ing to fi­nance its nu­mer­ous projects and meet other de­mands

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