Foreign debt rises to $51b, Reps decry needless borrowing
By Jeph Ajobaju, Chief Copy Editor
Nigeria’s foreign debt has risen to $51 billion, with Bola Tinubu following the same trajectory trod by Muhammadu Buhari, amid dwindling revenue exacerbated by wasteful spending and failure to cut the huge cost of governance.
Accountant General of the Federation (AGF) Oluwatoyin Madein disclosed the debt in Abuja at a session on the 2024-2026 Medium Term Expenditure Framework and Fiscal Strategy (MTEF-FS) Paper organised by the House of Representatives Committee on Finance.
She was accompanied by Ministry of Finance Incorporated Chief Executive Officer, Armstrong Katang.
Nigeria’s foreign debt is expected to rise further following recent Senate approval for Tinubu to borrow additional $7.8 billion and €100 million as part of the 2022-2024 borrowing plan.
Foreign debt as of June 2023 was $43.2 billion, with domestic debt at N54.1 trillion, bringing public debt to N113.4 trillion.
Coupled with unending naira depreciation, total public debt is projected to reach N130 trillion.
However, efforts are ongoing “to block revenue leakages and increase revenue generation,” Madein assured the lawmakers.
“The revenue generation and its collection is dwindling in comparison with the expenditure set against the money collected.
“But currently, a series of efforts are ongoing to shore up revenue, block the leakages and improve on the revenue that is being brought into the federation.
“Inasmuch as the revenue is in this position, the expenditure too has not also been helping matters, especially with the current economic reality where the prices of things are going up regularly.
“The expenditure too is on the rise and definitely the strategies to increase revenue must be worked upon on a continuous basis to ensure that we are having funds to meet the expectations of Nigerians.”
She pleaded with the committee to back up her office “with all the plans, strategies, ideas” to support the efforts to increase revenue.
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Reps’ responsibility to exercise oversight functions
Committee Chairman Abiodun Faleke described the MTEF as the basis of the annual budget “which is itself the backbone of the implementation of the federal government’s plans and policies.”
As representatives of the Nigerian people, he stressed, lawmakers have “the onerous responsibility of delivering democratic dividends to the door steps of our constituents in line with our campaign promises, per The PUNCH.
“The committee is committed to ensure that value for money is attained in all government agreements.
“Our revenues have been reducing over the years due to decreases in oil revenues which used to be our major earner. The committee has vowed to get to the bottom of these oil shortfalls.
“The NNPCL [Nigerian National Petroleum Company Limited], our oil asset managers, give oil theft as the main cause; however how are our marginal field operators performing vis-a-vis the various oil fields potentials?
“How much deductions at source from oil productions are occurring due to NNPC signed agreements over the years that are now impacting on our revenues?
“Even in the light of these revenue shortfalls, the federal government is still losing revenue from various waivers and exemptions granted to various organisations.
“In 2024, the Budget Office estimated a loss in revenue of over N2.7 trillion.
“We can only achieve them through the powers bestowed on us by the Constitution of the Federal Republic of Nigeria (as amended) through oversight, representation and law making. That is the gumption of the oath we took during inauguration of the 10th House of Representatives.
“These sessions are expected to be held at least quarterly so that projections agreed upon here are monitored and oversight reports laid before the House and Nigerians on the progress of the budget.”
Faleke urges MDAs to rise up to their responsibilities
Faleke emphasised the importance of revenue for the execution of government programmes, saying the committee “has observed various factors that have caused shortfalls in expected income and charged the Ministries Departments and Agencies [MDAs] to rise to their responsibilities in the interest of the nation.
“The committee will not accept such laxity on the part of MDAs in not negotiating the best for the country.
“The $ 11 billion P&ID fiasco is still fresh in our minds where the whole country was almost held hostage to a fraudulent agreement.
“Another agreement signed on behalf of the government by NBET and Azura Power has committed payments of over $30 million per month. This agreement is dollar denominated and applicable even now in times of acute foreign exchange shortages.
“The committee is committed to ensure that value for money is attained in all government agreements.
Faleke, who represents Ikeja Federal Constituency in Lagos, lamented the negative impact of poor revenue which leaves the federal government with no option than to take loans.
“This continuous borrowing due to these budget deficits has ballooned our debt servicing payments to the sad situation where last year [2022], we spent over 95 per cent of our revenues on debt servicing.”
N13.95tr spent to fund budget deficits in 2 years
The total available amount for the federal budgets for 2021 and 2022 was N10.51 trillion, according to documents obtained from the Budget Office.
The total amount spent on recurrent expenditure was N19.37 trillion and capital expenditure N3.79 trillion. The total amount spent on the budget in the two years was N24.47 trillion, and the total deficit was N13.95 trillion.
Abuja anticipates total revenue for the 2023 budget to be N8.63 trillion; recurrent expenditure (N13.30 trillion), and capital expenditure (N3.37 trillion).
It expects to spend N17.64 trillion on the 2023 budget and fund the deficit with N9.01 trillion. It spent N4.41 trillion in the first quarter (Q1 2023), made N2.16 trillion, and borrowed N2.20 trillion.