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BIG STORY

Economy: External Debt Rises By 288.18% To $40bn Under Buhari — DMO

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A report by the Debt Management Office has shown that Nigeria’s total external debt has risen from $10.32bn on June 30, 2015, to $40.06bn as of June 30, 2022.

This means that there has been an increase of 288.18 percent in seven years.

A breakdown shows that in 2015, 36 states had $3.27bn external debt while the Federal Government had $7.05bn.

By 2022, states’ external debt rose to $4.56bn, while the Federal Government’s external debt increased to $35.5bn.

The debts included loans from multilateral sources such as the World Bank, the African Development bank, and the International Monetary Fund.

They also included bilateral loans from China, France, Japan, Germany, and India, as well as commercial sources including Eurobonds and Diaspora bonds.

Nigeria’s external debt ballooned as the naira lost value, increasing Nigeria’s debt service burden and worsening its ability to service debt. The International Monetary Fund recently said that the long-term rate of the depreciation of the naira equated to a loss of 10.6 percent of its value annually since 1973.

According to the IMF, this rate was 1.5 times higher than the long-term rate of the currencies of other emerging markets and developing economies at 7.2 percent and sub-Saharan Africa at seven percent over the same time period.

The IMF said, “Its exchange rate underwent more persistent depreciation. Nigeria’s long-term rate of currency depreciation (on average 10.6 percent annually since 1973) was 1.5 times higher than both EMDE (7.2 percent) and SSA (seven percent). Given the limited availability of long-term data, it is difficult to estimate the exact reasons.”

The Bank of America recently said Nigeria’s local currency unit was set to weaken further next year as its current exchange rate to the dollar was well above fair value.

According to a report by Bloomberg, the bank said, “Three indicators, the widely-used black-market rate, the central bank’s real effective exchange rate, and our own currency fair value analysis shows the naira is 20 percent overvalued.

“We see scope for it to weaken by an equivalent amount over the next six-nine months, taking it to as high as 520 per USD.”

During a workshop on tax expenditure organized by the ECOWAS Commission in Abuja, financial experts advised that Nigeria and other West African Countries should move away from reliance on foreign assistance to the financing of developmental projects in the region.

According to them, over-dependence on financial aid and external loans might affect the long-term prosperity of the entire region.

The Special Advisor to the Director (Custom Union and Taxation in ECOWAS), Gbenga Falana, while emphasizing that the debt profile of most of the countries in the sub-region was mounting, stressed the need for West African countries to look inwardly and finance local projects through effective domestic resource mobilization.

Reacting, the Managing Director/Chief Executive Officer of Cowry Asset Management Limited, Mr. Johnson Chukwu, said that high external debt would impose a huge debt service on the economy.

He said, “This will impose a huge debt service on the economy, particularly at a period when we have low revenue from oil sales. If the revenue from oil sales does not improve, then the government will be struggling to meet that debt service obligation to foreign lenders.”

However, he noted that Nigeria could service its foreign debt at the current level, but a constant increase in debt without a corresponding increase in foreign currency earnings could put the country in a difficult position.

BIG STORY

Lagos State Begins Strict Enforcement Of Styrofoam, Single-Use Plastics Ban Today

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In a bold effort to protect the environment and safeguard public health, the Lagos State Government has officially begun enforcing the ban on the sale and use of Styrofoam and single-use plastics throughout the state.

Commissioner for the Ministry of the Environment and Water Resources, Mr. Tokunbo Wahab, confirmed that enforcement takes effect from today, July 1, 2025.

“Many believed that after the last period of grace, the state government would succumb to blackmail and the spread of half-truths to extend the deadline. But this is a total no,” Wahab said.

He stressed that the decision is rooted in the government’s responsibility to preserve lives, protect property, and promote the overall health of residents.

“There is no going back. Anyone found culpable will be prosecuted in accordance with the state’s environmental laws,” he added.

The ban seeks to address the environmental damage caused by non-biodegradable waste, which has been a major contributor to flooding, marine pollution, and public health issues in Lagos.

Residents, businesses, and food vendors are encouraged to switch to environmentally friendly packaging alternatives as part of the state’s ongoing campaign for a cleaner, healthier, and more sustainable Lagos.

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BIG STORY

Law Enforcement Agencies Benefitted From Petrol Subsidy Scam — Former EFCC Chairman Bawa

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Abdulrasheed Bawa, former chairman of the Economic and Financial Crimes Commission (EFCC), says law enforcement agencies were among the beneficiaries of the petrol subsidy fraud.

In his latest publication, The Shadow of Loot & Losses: Uncovering Nigeria’s Petroleum Subsidy Fraud, Bawa revealed that Nigeria lost $450 million to the subsidy scam under the Petroleum Support Fund (PSF) between 2006 and 2012.

He noted that several oil marketers involved were prosecuted and jailed, with 80 percent of the embezzled funds recovered.

During an interview on Arise Television’s programme Prime Time, Bawa pointed out that many individuals tied to the fraud were compromised.

“Everybody was benefitting from the scale and the scam, including law enforcement,” Bawa said.

“People can be compromised in such a way that they will look the other way around. It’s a general thing.”

The former anti-corruption chief also urged Nigeria to push back against damaging external narratives, particularly the idea of “relooting” recovered public funds.

He argued that the country must reject the perception that it is involved in “relooting the loot”, a term used to describe alleged misuse of retrieved assets.

“Nigeria should be able to challenge the international community that is always thinking negative about our country,” he said.

“This idea of relooting the loot shouldn’t be discussed against us as a country. Nigerians and non-Nigerians should have the ability to trust in our leaders.”

Bawa further stated that Nigerians have increasingly accepted negative portrayals imposed by foreign voices.

“It has now become like a norm among us Nigerians to take in what the international community perceives us to be,” he added.

When asked about the repeated controversies surrounding EFCC chairs, Bawa dismissed suggestions of political witch-hunting but acknowledged the recurring pattern.

“It’s just a phase that has to come and go. People always talk. Whether you’re telling the truth or not, people will say something,” he said.

Bawa served as EFCC chairman from 2021 to 2023.

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BIG STORY

Reps Kick As Ibas Allocates N24bn For CCTV, N30bn For Gunboats In Rivers’ 2025 Budget

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The ad hoc committee of the house of representatives overseeing Rivers state has criticised Ibok-Ete Ibas, the state’s sole administrator, over certain allocations in the N1.48 trillion 2025 budget.

The senate had approved the N1.48 trillion appropriation bill for Rivers state on June 25.

A breakdown of the budget shows that N120.8 billion is designated for debt servicing, N287.38 billion for recurrent non-debt spending, and N1.077 trillion for capital projects.

At a budget defence session in Abuja on Monday, Julius Ihonvbere, the house majority leader and chair of the ad hoc committee, highlighted several concerns after reviewing the proposal.

Ihonvbere raised questions about the N24 billion set aside for CCTV, the N30 billion allocated for gunboats, and the N23 billion marked as contingency funds. He called for a full explanation and justification of these figures.

He noted that the budget lacked a medium-term expenditure framework (MTEF), which is a statutory requirement.

Ihonvbere also questioned the state’s decision to finance federal projects without a formal reimbursement agreement from the federal government.

He requested detailed records of local government fund transfers, including how third-tier funds are currently managed.

“We need additional details for those allocations. We request details of the state’s Internally Generated Revenue (IGR) in the last three months,” he said.

“That will enable us to know your financial flows so that we can weigh it against the deficit in the budget in terms of financing it and carrying out some of the projects.

“We also need details of transfers to local governments — essentially, how local government funds that came into the state are being managed at the moment.

“Those documents we have requested must reach us within 48 hours; rest assured that we are all on the same side in terms of getting Rivers working again.

“We want to ensure that we promote a lot of accountability and ensure that the interests of the people themselves, no matter how remote they are from the state capital, are protected.”

Responding for Ibas, Andrew Nweke, senior special assistant on strategy and policy, explained that many of the budget items were inherited by the current administration.

He said the allocations align with the priorities identified by the people of Rivers, following assessments conducted by implementing agencies.

Nweke said the CCTV allocation was intended for installing modern surveillance systems at the government house.

He also said the gunboats were designated for supporting security agencies in patrolling the state’s waterways.

He added that the contingency funds would be used to address emergencies such as flooding and insecurity.

He assured the committee that the requested documents would be submitted.

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