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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

Kidnapping Children Lesser Evil Than Killing Soldiers, Govt Must Negotiate With Bandits — Sheikh Gumi

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Islamic cleric Sheikh Gumi has described the kidnapping of schoolchildren as a “lesser evil” compared to killing soldiers, insisting that Nigeria must negotiate with bandits to prevent greater bloodshed.

Speaking in an interview with the BBC shared on Tuesday, Gumi said that while the abduction of minors is “evil,” it remains less grievous than murder — particularly in situations where kidnapped children are eventually released unharmed.

“Saying that kidnapping children is a lesser evil than killing your soldiers, definitely is lesser. Killing is worse than, but they are all evil. It’s just a lesser evil. Not all evils are of the same power.

He cited previous incidents, including the mass abduction in Kebbi State, arguing that the victims were freed without fatalities.

“So it’s a lesser evil than, like, what happened in Kebbi. They abducted children, and they were released. They didn’t kill them.”

The remarks come as more than 315 people — including 303 students and 12 teachers — were abducted in Niger State.

On 7 December, the Federal Government announced the release of 100 students, while an earlier report confirmed the escape of 50 others just days after the kidnapping.

“It’s an evil, and we pray that they escape”, Gumi responded briefly when asked what he would say to their parents.

Gumi also defended his long-held stance that negotiating with bandits is unavoidable, describing engagement with bandits and other non-state actors as a practical strategy to secure peace and save lives, and noting that “everybody negotiates with bandits.”

“That word [‘we don’t negotiate’], I don’t know where they got it from. It’s not in the Bible. It’s not in the Quran.

“In fact, it’s not even in practice. Everybody’s negotiating with outlaws, non-state actors, everybody. So who got it, and where did they get that knowledge from? We negotiate for peace and our strategic interests. If negotiation will bring stoppage to bloodshed, we will do it.”

The cleric stressed that his past engagements with bandits were not carried out secretly or independently.

“I go there with the authorities. I don’t go there alone. And I go there with the press,” he said.

Gumi revealed that his last direct meetings with bandit groups were in 2021, saying he made marathon efforts to bring various factions together, but the federal government at the time “was not keen” on the initiative.

He said once the groups were officially designated as terrorists, he completely withdrew from any contact.

Turning to the wider security situation, the former army captain argued that Nigeria’s military cannot shoulder the burden alone.

“We need a robust army… but even the military is saying our role in this civil unrest, in this criminality, is 95% kinetic. The rest is the government, the politics, and the locals. The military cannot do everything.”

Gumi also maintained that most bandits are Fulani herdsmen, not urban Fulani, urging a clear distinction between the two. He described their struggle as rooted in survival and cattle rearing:

“They are fighting an existential war… Their life revolves around cattle. In fact, they inherit them. They’ll tell you, ‘This cow I inherited from my grandfather.’ They are mostly Fulani herdsmen, not the Fulani town, because you have to differentiate between the two.”

Gumi’s remarks underscore the delicate balance between dialogue and enforcement in addressing Nigeria’s persistent insecurity, particularly in the northwest, where kidnappings, bandit raids, and violence continue to disrupt communities.

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BIG STORY

EFCC Probes ‘46 Bank Accounts’ Linked To Former AGF Abubakar Malami

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Abubakar Malami, former attorney-general of the federation (AGF) and minister of justice, spent Monday night at the headquarters of the Economic and Financial Crimes Commission (EFCC) as interrogations over an ongoing investigation intensified, TheCable has learnt.

An associate of the former minister told TheCable that Malami was invited for questioning on Monday but arrived late in the evening, which resulted in him staying overnight to continue responding to investigators’ queries.

The associate also disclosed that 46 bank accounts allegedly linked to Malami are currently under investigation, forming a major part of the EFCC’s line of inquiry.

The former AGF would be reporting to the EFCC daily as the probe continues.

Following his earlier interrogation on November 29, the former AGF had said in a post on X that the session “was successful” and that he had been scheduled for “further engagement” with investigators.

“The engagement was successful, and I am eventually released while on an appointment for further engagement as the truth relating to the fabricated allegations against me continues to unfold,” he said.

FIVE SUSPICIOUS MEGA DEALS

In 2023, It was widely reported that Malami would be questioned over at least five suspicious transactions during his time in office.

Malami’s name featured in a number of questionable deals under the Muhammadu Buhari administration.

The transactions bordered on the mysterious payment of $496 million to Global Steel Holdings Ltd (GSHL) as settlement for the termination of the Ajaokuta Steel concession nine years after the Indian company had waived all claims for compensation.

Another contentious matter is Malami’s handling of the sale of assets worth billions of naira forfeited to the EFCC by politically exposed persons.

The former minister’s role in the $419 million judgment debt awarded to consultants who claimed to have facilitated the Paris Club refunds to states is also up for scrutiny.

Others are the curious agreement to pay Sunrise Power $200 million compensation in its dispute with the federal government over the Mambilla power project, and the duplicated legal fees in the transfer of $321 million Abacha loot from Switzerland to Nigeria.

Meanwhile, on November 17, Malami declared his intention to contest the 2027 governorship election in Kebbi state.

The former AGF resigned from the APC in July and joined the African Democratic Congress (ADC).

He said the decision followed “wide consultations and deep personal reflection”, adding that he left the ruling party out of “love for our nation and concern for the hardship our people are facing”.

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BIG STORY

BREAKING: Gov Fubara Dumps PDP, Defects To APC

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Governor Siminalayi Fubara of Rivers State has defected to the All Progressives Congress (APC) from the Peoples Democratic Party (PDP).

According to Channels TV, the governor announced his defection at a stakeholders meeting at the government house in Port Harcourt.

More to follow…

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