N42.84 trn debt: Nigeria not borrowing for frivolities – FG




With Nigeria’s debt standing at N42.84trillion, the federal government Thursday said it was borrowing to engender infrastructure development and not for frivolities.

It also accused the opposition People’s Democratic Party (PDP)’s presidential candidate, former Vice President Atiku Abubakar on ‘dubbing’ as his economic blueprint, the achievements of the Muhammadu Buhari administration, describing it as a poor copy of the administration’s model.

Minister of Information and Culture Lai Mohammed said this at a press conference in Abuja.

Asked if President Buhari’s call at the United Nations General Assembly (UNGA) for the cancellation of the mounting debts hanging on Nigeria was not a mockery and embarrassment, the minister said it’s not correct to say the debt was mounting.

DMO   

In a recent update, the Debt Management Office(DMO) had put the Total Public Debt Stock, representing the Domestic and External Debt Stocks of the Federal Government of Nigeria (FGN), the thirty-six (36) State Governments and the Federal Capital Territory (FCT), at N42.84 trillion (USD103.31 billion) as at June 30, 2022. The comparative figuresfor March 30, 2022, was N41.60 trillion (USD100.07 billion).

“The Total External Debt Stock was USD40.06 billion (N16.61 trillion) as at June 30, 2022, which was about the same level as the figure for March 31, 2022, which stood at USD39.96 billion (N16.61 trillion). Over fifty-eight percent (58%) of the External Debt Stock are concessional and semi-concessional loans from multilateral lenders such as the World Bank, International Monetary Fund, Afrexim and African Development Bank and bilateral lenders including Germany, China, Japan, India and France,” it said in s statement posted on its website.

FG’s reaction

Answering questions during the parley, the Information and Culture Minister, Alhaji Mohammed said, it’s not correct to say the nation’s debt was mounting.

“I don’t think it’s correct to say an administration is mounting debts. I don’t know of any country in the world that is not borrowing.  What’s important is what you used the money borrowed for.  We don’t borrow for frivolities; we borrowed to construct good roads.

“Like I said, across the country, we have constructed 8,352.94 kilometres of roads, rehabilitated 7,936.05 kilometres of roads, constructed 299 bridges, maintained 312 bridges and created 302,039 jobs in the process. We have also delivered houses in 34 states of the Federation under the first phase of the National Housing Project. We were able to achieve these through a combination of budget increase and innovative infrastructure financing methods.

“On debt forgiveness, it’s not a sign of weakness it’s about courage, about confidence about understanding and about what the issues are. The president is not asking for debt forgiveness for Nigeria alone, but for all developing counties because of their antecedents.” 

Atiku’s blueprint  

Speaking on Atiku’s economic blueprint, the minister said: “Let me say, straightaway that the so-called blueprint is a crude attempt at copying all that the Administration of President Muhammadu Buhari has done, especially in the areas of job creation, infrastructure financing, relationship with the private sector, rejuvenation of the power sector, poverty reduction, debt management and the overall management of the economy.”

He further said: “It is more shocking that an opposition that has condemned all that this Administration has done would turn around to weave its so-called Economic Blueprint around the same things that are currently being done by the same Administration. This press conference, therefore, is aimed at exposing the hypocrisy inherent in an opposition that condemns an Administration while also showcasing a blueprint that is nothing but a poor version of what’s on ground.”

On infrastructure, Mohammed said: “In his Economic Blueprint that ‘rebuilding infrastructure and reducing infrastructure deficit will enhance the carrying capacity of the economy and unleash growth and wealth creation’. No one understands this better than this Administration. Even our worst critics will agree that our record on infrastructure development is next to none in the history of this country.”

“We were able to achieve these through a combination of budget increase and innovative infrastructure financing methods.

“Whereas we met a budget of N18.132 billion for the roads component of the Federal Ministry of Works when we assumed office in 2015, the budget for the Federal Ministry of Works and Housing increased exponentially to N260.082 billion in 2016; N274.252 billion in 2017, N356.773 billion in 2018, N223.255 billion in 2019, N227.963 billion in 2020 and N241.864 billion in 2021. Therefore, for anyone using this as a campaign stunt, without acknowledging what we have done so far, is cheap and disingenuous.

“The former Vice President also promised to ‘break the jinx’ in infrastructure financing. Really? We state, unequivocally, that the worst jinx in infrastructure financing was the PDP Administration from 1999 to 2015. Indeed, the Buhari Administration has long broken that jinx, leveraging on such innovative schemes as the Presidential Infrastructure Development Fund (which is being used to finance the Lagos-Ibadan Expressway, 2nd Niger Bridge and the Abuja-Kaduna-Zaria-Kano road), Sukuk (which has delivered a total of 1,881 kilometres of roads between 2017 and 2020) and the Road Infrastructure Tax Credit Scheme (for the construction and rehabilitation of Lokoja-Obajana-Kabba-Ilorin road, reconstruction of Apapa Wharf road, construction of Apapa-Oworonsoki-Ojota road and the Bonny-Bodo road with bridge). The NNPC-funded part of the Road Infrastructure Tax Credit Scheme has also delivered nine roads in North-Central, three in North-East, two in North-West, two in South-East, three in South-South and two in South-West for a total of 1,804 kilometres of roads.”

The minister also faulted the ex-VP’s claims on power generation and poverty reduction.

“In his presentation, the former Vice President said ‘Nigeria under the APC-led government has consistently run on budget deficits since it came to power in 2015’, and that these ‘budget deficits are often above the 3% threshold permissible under the Fiscal Responsibility Law’. This is a misrepresentation of the facts.

“The truth is that Nigeria has been running on budget deficits since 2009 (not since 2015), even when oil prices were over US$100 per barrel. You will recall that oil prices fell significantly from mid-2014, resulting in the country’s economic recession in 2016. The urgency to recover from the recession through an expansionary fiscal policy resulted in the continued budget deficits. However, in the last three years, the deficit level exceeded the 3% threshold stipulated in the Fiscal Responsibility Act 2007. Again, this is understandable because shortly after the Nigerian economy recovered from recession; it was hit by the effects of the Covid-19 pandemic.

“What His Excellency failed to tell his audience is that the Fiscal Responsibility Act, Section 12(2), allows for the budget deficit to exceed the 3% threshold if, in the opinion of the President, there is a clear and present threat to national security or the sovereignty of the Federal Republic of Nigeria,” Mohammed said.

PDP campaign team faults minister  

Countering the minister’s position, the PDP Presidential Campaign Organisation said he lied.

In a statement Thursday, the campaign team accused the minister of making a barren attempt to catalogue perceived achievements of the current All Progressives Congress (APC) administration.

The campaign organisation berated the minister for lying against Atiku and also described Lai’s claim as a tsunami of a lie.

 “It has been openly acknowledged that this current administration came into power without a single sheet of paper of what could be called a policy document. Nigerians are aware that in both 2015 and 2019, it took the APC six months and three months, respectively to constitute a cabinet. 

“Perhaps the Minister might be interested in telling Nigerians if it is also part of the APC manifesto to foot drag in forming a government,” Atiku’s Campaign Organisation added.

It explained that the first economic recession that the country experienced in 2016, which happens to be the worst economic decline in thirty years, happened primarily because the APC administration applied what can be called a catch-up strategy to the early signals of the recession.

The PDP Presidential candidate campaign organisation insisted that the tenure of the APC has been nothing but a sheer waste of time.

According to Atiku’s Campaign Organisation, the catch-up economic strategy of the ruling party had left the people more malnourished, sick and disillusioned.  

It said: “The poor records of the APC in the areas of economic management, jobs creation, education, security and in virtually all spheres of our national life is the reason why there is a lot of anxiety about the 2023 general election. Indeed, it needs to be stressed that next year’s election will be a referendum on the APC and it is not in doubt that the ruling party in Nigeria will present a global case study of how a political party can lose popular goodwill within a short period. 

“Nigerians of all hues, both the rich and those that are not; the educated and those who are not; the elderly and the young are all witnesses to the scandal that the APC has become in the art of governance. 

“Nigerians are rallied in their frustration in the APC and the promise of a better future that our presidential candidate, Atiku Abubakar holds for the country after his victory in the 2023 presidential election.

“What Minister Lai Mohammed reeled out as achievements of the APC is a compilation of the reasons why Nigerians have roundly rejected the ruling party. It’s nothing but a testimonial of failures. Conversely, what His Excellency Atiku Abubakar presented to the organised private sector in Lagos State last week represents the hopes of a new beginning, which Nigerians eagerly anticipate.  

“Trying to associate the Atiku policy plans with the failed policies of the APC is the comical height of Minister Lai Mohammed’s aversion for the truth. 

“It is contempt not just against the PDP and our presidential candidate, but also to the whole nation. Lai Mohammed must apologize to Nigerians for such insensitive onslaught against truth in broad daylight.”

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