The Federal Government has assured Nigerians that there is no cause for alarm over the country’s debt profile both domestic and external as being speculated by scaremongers.
The Minister of Information and Culture, Alhaji Lai Mohammed gave the assurance on Monday in Lagos while briefing newsmen on the major achievements of the President Muhammadu Buhari’s administration for the outgoing year
Mohammed said there were misrepresentations in the figures being pushed out in certain quarters about the debt profile, adding that the country had not reached its debt ceiling of 25 per cent in total public debt stock to Gross Domestic Product (GDP).
“Recently, there have been concerns in certain circles about the country’s growing debt, both domestic and external.
“In the process, there has been some misrepresentations and scare mongering.
“We, therefore, believe it is important to put things in perspective, so our citizens will be well informed,’’ he said.
According to the minister, it is not correct to say that Nigeria’s external debt alone is 81.274 billion dollars.
“The public debt stock is actually a cumulative figure of borrowings by successive governments over many years.
“It is, therefore, not appropriate to attribute the public debt stock to one administration.
“Nigeria’s total public debt stock in 2015 was 63.80 billion dollars comprising 10.31 billion dollars of external debt and 53.49 billion dollars domestic debt.
“By June 2019, the total debt stock was 83.883 billion dollars, made up of 27.163 billion dollars of external debt and 56.720 billion dollars domestic debt,’’ he clarified.
Mohammed said there was no cause for alarm because Nigeria had a debt ceiling of 25 per cent in the total public debt stock to Gross Domestic Product (Debt/GDP), which it had operated within.
He said the ratio for Dec. 31, 2018 and June 30, 2019 were 19.09 per cent and 18.99 per cent respectively.
The minister said that the debt service to revenue ratio had been higher than desirable, hence the push by the government to diversify the economy and increase oil and non-oil revenues significantly.
According to him, the government is also widening the tax base to capture more tax-paying citizens.
“In the face of massive infrastructure decay, no responsible government will sit by and do nothing.
“This administration’s borrowing, therefore, is aimed at revamping our infrastructure, including roads, bridges, railways, waterways and power to help unleash the potential of the nation’s economy.
“The loans for the education sector will contribute to the development of our human capital, while the loans for the agricultural sector will help the move to diversify the economy.
Recall former President Olusegun Obasanjo said Nigeria faces an impending bankruptcy, with the country’s external debt ballooning by 700 per cent in four years.
He raised the bankruptcy alarm recently at an event in Lagos tagged “The Nigerian Story “created by the chief executive of Eureka Productions, Caroline Moore.
The former President who was a keynote speaker at the event reportedly put Nigeria’s external debt at 81.2 billion dollars (about N24.947 trillion) from 10.32 billion dollars in just four years.
Obasanjo had claimed that Nigeria would need to commit half of its foreign earnings to servicing its current level of indebtedness.
Lai Mohammed says Nigeria’s economy witnessed strong performances in 2019
The Federal Government on Monday said the nation’s economy in the outgoing year 2019 witnessed a strong performance, building on the steady recovery since the last recession.
The Minister of Information and Culture, Alhaji Lai Mohammed disclosed this at a media briefing in Lagos while reeling out the major achievements of President Muhammadu Buhari’s administration for the outgoing year.
“In 2019, the Nigerian economy grew at an
average rate of 2.2 per cent over the first three quarters, compared to 1.7 per cent over the same period in 2018.
“Both the oil and non-oil sectors performed considerably better in 2019 than in 2018.
“The oil sector grew at an average of four per cent over the three quarters, compared to 2.4 per cent in 2018, while the non-oil sector grew by two per cent, compared to 1.7 per cent in 2018,’’ he said.
Mohammed said the average daily oil production level rose to its highest in the last three years, reaching two million barrels per day (mbpd) in 2019, compared to 1.8 mbpd in 2016, and 1.9 mbpd in both 2017 and 2018.
He said in particular in the third quarter of
2019, the major growth drivers were: Information and communications, agriculture, mining and quarrying, transportation and storage as well as manufacturing.
The minister noted that the major growth drivers all had seen considerable focus by the government.
He said in the third quarter of 2019, a total of 34 economic activities witnessed positive expansion, same as in 2018.
On inflation rate, the minister said the trends indicated that overall macroeconomic stability was being achieved, with inflation rate steadily trending downwards.
“Year-on-year headline inflation rate declined steadily from 15.1 per cent in January 2018 to 11.9 per cent in November 2019.
“Year-on-year core inflation rate slowed from 12.1 per cent to nine per cent between January 2018 and November this year.
He said that year-on-year food inflation rate decreased from 18.9 per cent in Jan. 2018 to 14.5 per cent in Nov. 2019.
Mohammed said for the first time since 1999, the Executive, in collaboration with the National Assembly succeeded in introducing the 12-month (January to December) budget cycle.
He described the development as important and major, considering the damage that delayed passage of budgets had done to the economy over the years.
The minister assured that with the new cycle, there would be a more rapid infrastructure development as well as more job creation.
