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Nigeria Borrowed N6.64tn, Serviced Debt With N2.93tn In 2021 – DMO

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The Debt Management Office on Thursday said Nigeria’s total public debt stock increased to N39.56tn in 2021 from N32.92tn in 2020.

The Director-General, DMO, Patience Oniha, said this at a media briefing in Abuja.

According to her, the total debt includes new borrowings by the Federal Government and the sub-nationals.

She also said that the amount helped in financing the budget deficit, capital projects and support economic recovery.

Oniha said, “Nigeria’s total public debt as of December 31, 2021, was N39.56tn or $95.78bn. The amount represents the total external and domestic debts of the Federal Government of Nigeria, 36 state governments, and the federal capital territory.

“The comparable figure for December 31, 2020, was N32.92tn or $86.39bn. The public debt stock for December 31, 2021, includes new borrowings by the FGN and the sub-nationals. For the FGN, it would be recalled that the 2021 appropriation and supplementary acts, included total new borrowings (from domestic and external sources) of N5.49tn to part-finance the deficit.

“Borrowings for this purpose and disbursements by the multilateral and bilateral creditors account for a significant portion of the increase in the debt stock. Increases were also recorded in the debt stock of the states and the FCT.”

She further said that despite the debt increase, the country is still within the total public debt stock to the Gross Domestic Product limit of 55 percent set by the World Bank and 70 percent set by the Economic Community of West African States.

Oniha also said that the Federal Government was “mindful of the relatively high debt-to-revenue ratio” and has established certain measures to increase revenues through the strategic revenue growth initiative and the introduction of Finance Acts since 2019.

She said, “The new borrowings were raised from diverse sources, primarily through the issuances of the Eurobonds, sovereign Sukuk, and the FGN bonds. These capital raisings were utilized to finance capital projects and support economic recovery.

“With the total public debt stock to GDP as of December 31, 2021, of 22.47 percent, the debt-to-GDP ratio remains within Nigeria’s self-imposed limit of 40 percent. This ratio is prudent when compared to the 55 percent limit advised by the World Bank and the International Monetary Fund for countries in Nigeria’s peer group, as well as, the ECOWAS convergence ratio of 70 percent.”

However, findings showed that Nigeria spent N2.93tn on debt servicing payments in 2021, according to the data obtained from the DMO.

Between January and March 2021, Nigeria spent N612.71bn on domestic debt servicing, while it spent $1bn (N415.92bn) on external debt servicing, giving a total of N1.03tn.

From April to June 2021, the country spent N322.7bn on domestic debt servicing and $299m (N124.36bn) on external debt servicing, showing a total of N447.06bn.

From July to September 2021, Nigeria spent N808.49bn on domestic debt servicing and $520.78m (N216.6bn) on external debt servicing, giving a total of N1.03tn.

Between October and December 2021, Nigeria spent N310.5bn on domestic debt servicing, while it spent $286.35m (N119.1bn) on external debt servicing, giving a total of N429.6bn.

The official exchange rate of the Central Bank of Nigeria, which showed $1 =N415.92 as of March 17, was used for the external debt servicing.

Economists, dons warn FG of hard times, repayment challenges

Reacting to the development economists and dons have warned the Federal Government over the country’s rising debt profile, saying repayments may become challenging due to the nation’s revenue problems.

A professor of Economics and Public Policy at the University of Uyo and the Chairman of the Foundation for Economic Research and Training, Prof. Akpan Ekpo said, “The rising debt profile is not healthy for the economy even though we are still within the so-called range if we look at the debt to the GDP ratio, but GDP does not pay debt; revenue pays the debt.

“If you look at the debt revenue ratio, we are in trouble because most of our revenue depends on oil and we are not sure of that revenue, it fluctuates.

“But with this Ukraine/Russian war, the oil price has gone up so we should be able to save some of that revenue that we earn now to pay some of these debts. When you take some of these debts now, you are putting future generations in trouble. They should be transparent about the debt.”

Also, the Chief Executive Officer, Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf, said the rising debt profile of the government raised serious sustainability concerns.

Yusuf, who was the former director-general, of the Lagos Chamber of Commerce and Industry, said, “When we take account of borrowings from the CBN and the stock of AMCON debt, the debt profile would be more than N50tn.

“The government tends to argue that the condition was not a debt problem, but a revenue challenge, but the truth is that debt becomes a problem if the revenue base is not strong enough to service the debt sustainably.

“It invariably becomes a debt problem.  The government’s actual revenue can hardly cover the recurrent budget which implies that the entire capital budget is being funded from borrowing. This is surely not sustainable.”

He said what is needed is the political will to cut expenditure and undertake reforms that could scale down the size of government, reduce governance costs, and ease the financial burden on the government.

Yusuf explained, “It is important to ensure that the debt is used strictly to fund capital projects, especially infrastructure projects, that would strengthen the productive capacity of the economy.  This is the position of the Fiscal Responsibility Act.

“Additionally, emphasis should be on concessionary financing, as opposed to commercial debts which are typically very costly.

Also reacting, a professor of Economics at the Olabisi Onabanjo University, Sheriffdeen Tella, said Nigeria’s current debt profile would only put further strain on the economy.

He said, “It (new debt) has worsened the situation because we have been spending over 80 percent of our revenue on servicing debt. So, the situation has worsened, and you know that the Minister of Finance said that to be able to meet up on subsidy on fuel, they would have to look for more money to do that. The government is always thinking of debt. I don’t know. The minister deserves a medal for debt accumulation.

Tella said it was misleading to consider that the ratio of Nigeria’s debt to the Gross Domestic Product is still relatively low.

“We are not safe because even the IMF and the World Bank have warned us. They have told us that we are borrowing too much. We are not going to look at the ratio of borrowed funds to the GDP; we are going to look at the rate of money borrowed to revenue because we are going to pay back with revenue. We are not going to pay back with the GDP. So, it is the revenue that we need to look at, and now that we are spending about 80 percent of our revenue to offset debts. The 20% is spent on what? General administration! That is why they owe salaries, pensions. At the end of the day, there is no more for development. There is no money for any other thing.”

Also speaking, the Chief Executive, Economic Associates, Dr. Ayo Teriba, said the N39tn figure was not a concern but the cost the country was carrying the debt.

He said, “Nigeria is carrying its debt at probably some of the highest costs in the world; that is inefficient. The problem with the debt stock is not the size. Nigeria’s debt is small relative to other countries’ debt, world average, or African average. It is not the size of the debt that matters but the quality of the debt.”

He added, “Government debts are usually classified into two categories; your debts are either investment grades or junk bonds. Nigeria carries a portfolio of 100 percent junk bonds, which means you issue the lowest quality bonds at home and abroad and they are the most expensive.”

“Their own (other countries) debt quality is so high because they have to pay interest and they don’t have to worry about repaying the principal, because the asset will repay the principal.

“Nigeria needs to learn from other countries on how to borrow in improving the quality of its debts.”

Also speaking the Managing Director, Cowry Assets Management, Johnson Chukwu, said he was not surprised that the nation’s debt had risen to the current level.

“That is not strange because the last report in September showed that it was N38tn. So, having got to N38tn in September, it is not out of place to expect the debt to have risen to N39tn now. Of course, we know that the government has continued to borrow and the deficit has continued to grow. And then, if you consider that the government has a deficit of more than N6tn last year, compared to the budget of about N14tn, the actual exchange was fairly above N6tn. So, you will recognize the fact that the government has continued to borrow to finance the budgetary deficit. So for me, it is not strange, it is not unexpected to get the figure as high as N39tn. We all know that the debt service obligation will continue to increase as a result of increased borrowing. And of course, you know when the debt service continues to increase without a commensurate income, it crowds out critical sectors like social services, education and it will also crowd out infrastructural investment. So those are the things Nigeria should expect.”

BIG STORY

Doyin Okupe Reacts To Peter Obi’s Viral Video, Says I Cannot Support Him Again

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Doyin Okupe, the former director-general of the Labour Party (LP) presidential campaign in 2023, says he “cannot support” Peter Obi again.

Okupe spoke on Monday during an interview with Seun Okinbaloye on Channels Television’s Politics Today.

He was reacting to a viral clip of Obi commenting on how the country’s economic situation offers little relief to people in the south-west, despite President Bola Tinubu being from the zone.

“Let us talk about what is happening today. Rice is about N100,000. We are not even sure where we are going to be. ‘It’s our turn’, ‘he is a Yoruba man’ — ask the people in Ogun, here is there any place you people buy bread cheaper?” Obi said in the viral clip.

The video generated mixed reactions on social media, with some supporting Obi’s comments while others criticised him.

Adding his voice to the criticism, Okupe described the former LP presidential candidate’s remark as an “insult” to people in the south-west.

He said Obi’s statement publicly demeaned the south-west, even though “eminent Yoruba people” had supported him during his presidential campaign in 2023.

“When Obi made that statement, it insulted us. I am a Yoruba man; I left everything and followed Obi.

“For the first time, Obasanjo left his circle of influence and deviated to support Obi,” Okupe said.

“I do not regret supporting Peter Obi. But now I cannot do it again. The reason why I did it was because we agreed that a southern president must emerge.

“I was approached that if a southern president must emerge, which zone must it come to? I said the south-east.

“If all these eminent Yoruba people supported you, why now bring us down publicly? It is wrong.”

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Lagos Muslim Cleric Bags Life Jail For Raping 14-Yr-Old Girl Inside Mosque

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Alani Rafiu, a Muslim cleric, has been sentenced to life imprisonment by an Ikeja Sexual Offences and Domestic Violence Court for raping a 14-year-old girl inside a mosque.

Justice Rahman Oshodi delivered the verdict on Monday, after finding Rafiu guilty of child defilement. The cleric was arraigned on October 28, 2021, for having sexual intercourse with the teenager, but pleaded not guilty, leading to a trial.

During the trial, the prosecution, led by B. Boye, presented three witnesses, including the victim, who testified against Rafiu. The prosecution provided compelling evidence, including the victim’s testimony and medical reports, which revealed a calculated pattern of predatory behavior by the cleric.

Justice Oshodi emphasized that Rafiu’s actions were particularly egregious due to his position of trust as a religious instructor and family friend.

The judge stated that the gravity of the offence could not be overstated, as Rafiu exploited the victim’s vulnerability and betrayed the trust placed in him.

“The gravity of your offence cannot be overstated. You betrayed the trust placed in you as a religious instructor and family friend.

“Instead of nurturing and protecting a vulnerable 14-year-old child entrusted to your spiritual care, you repeatedly sexually abused her in a place of worship.

“This conduct is criminal and represents a profound violation of secular and religious principles,” he said.

Oshodi further held that the evidence revealed a calculated pattern of predatory behaviour, as the convict deliberately isolated the child, exploited her vulnerability, and bought her silence with money.

“The evidence revealed a calculated pattern of predatory behaviour. You deliberately isolated the child, exploited her vulnerability, and bought her silence with money.

“The physical and psychological trauma inflicted on this young girl is immeasurable. At an age when she should have been focused on her education and development, she was subjected to experiences that no child should endure,” the judge held.

Oshodi also stated that having carefully considered all the evidence before the court, there was compelling and consistent proof establishing that the prosecutrix was indeed a child below the age of 18 years at the time of the alleged offence in May 2021.

He said the evidence manifested through multiple sources.

Oshodi said, “When the prosecutrix testified before this court, she stated that she was 15 years old and 14 when the alleged incident occurred.

“Notably, she was still attending primary school then, explicitly saying she was in Primary 3.

“The prosecutrix’s educational level, being in Primary 3, at the time of her testimony, while not determinative of age, provides supporting circumstantial evidence consistent with her being a young teenager rather than an adult.

“The consistency of these multiple sources of evidence – the police and guardian testimony, the prosecutrix’s evidence, and circumstantial evidence – all converge to establish beyond reasonable doubt that the prosecutrix was 14 years old at the time of the alleged offence in May 2021.

“The defence led no evidence to contradict these age-related facts, nor was the prosecutrix’s age challenged during cross-examination of any of the prosecution witnesses”.

The judge said the prosecutrix provided a detailed, firsthand account of sexual intercourse with the convict.

“Her testimony was specific. She offered a detailed sequential account of the sexual assault. She testified that at the mosque (where the convict, whom she referred to as Alfa), isolated her. He would then lock the door, remove her underwear, and instruct her to lie on the floor.

“She explicitly stated that Rafiu would then insert his penis into her vagina. When asked about frequency, she confirmed this occurred three times.

“She further testified that these acts would result in bleeding, which the convict would have her clean with a handkerchief. Afterwards, he would instruct her to put her underwear back on before taking her outside,” he said.

According to Oshodi, this testimony provides a direct account of penile-vaginal penetration, with specific details about the sequence of events, location, frequency, and aftermath of the sexual acts.

“The prosecutrix maintained during cross-examination that this occurred three times, explicitly stating, “He had sex with me three times.”

The judge noted that the prosecutrix testimony remained consistent even when challenged about the timeframe, clarifying that these incidents occurred.

He said the medical evidence further strengthened the evidence of sexual intercourse. It reports that the transection found in the prosecutrix’s vagina was “consistent with forceful penetrative injury to the [prosecutrix’s] anus and vagina”.

Before passing down the verdict, Oshodi said, “What makes your conduct particularly egregious is your abuse of religious authority and the sacred space of a mosque to perpetrate these violations.

“Places of worship should be sanctuaries of safety and spiritual growth, not venues for the exploitation of children.

“The medical evidence and the prosecutrix’s testimony paint a disturbing picture of the physical harm you caused.

The bleeding she experienced and your callous provision of a handkerchief to clean up the evidence of your abuse demonstrate a shocking disregard for her well-being.

“This court must protect children from sexual predators and send a clear message that such conduct will be met with the full force of the law.

“The sentence must reflect society’s abhorrence of child sexual abuse and serve as a deterrent to others who might contemplate similar crimes.

“Therefore, I now sentence you to life imprisonment by section 137 of the Criminal Law. Furthermore, under sections 33 and 38 of the Lagos State Domestic and Sexual Violence Agency Law, 2021, I order that you be registered as a sex offender in the Sex Offenders Register maintained by the Lagos State Government,” he held.

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UPDATE: Minors Freed As Court Strikes Out Suit Against 119 #EndBadGovernance Protesters

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A federal high court in Abuja has struck out the suit against 119 protesters charged over the nationwide #EndBadGovernance protest.

Obiora Egwuatu, the presiding judge, dismissed the case following an application by M.D. Abubakar, counsel to the Attorney-General of the Federation (AGF).

Abubakar had requested permission to take over and discontinue the suit.

During the session on Tuesday, Abubakar asked the court to allow the AGF to take over the charge.

This development comes just hours after President Bola Tinubu directed the attorney-general and law enforcement to release all minors detained over the protest.

As of the time of reporting, all the minors have been freed.

 

More to come…

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