CONTINUED FROM TUESDAY 5-1-16

Nigeria’s Public Debt Stock as at June 30, 2015

Debt Category
Amount Outstanding in USD Amount Outstanding in NGN
A.
External Debt Stock (FGN + States) 10.317.Bln 2.032 Trln
Domestic Debt Stock (FGN Only) 42. 633bln 8,397 Trln

Sub-Total 52.950 bln 10.429 trln
B.
Domestic Debt of States*
10. 857 bln 1.690 trln

C.
Grand-Total (A+B) 63.807 bln 12.119trln

Source: Debt Management Office, Federal Republic of Nigeria.
We are deeply worried about the expression of debt as a percentage of GDP. Expressing debt as a percentage of the GDP, which is a measure of total value of goods and services produced in a country, is often misleading. The idea behind it is actually to compare what Nigeria owes with what it earns (since the GDP can also be thought of as National income). The problem however is that the Nigerian government does not have access to all the national income. It only has access to its own share of oil/gas revenue and taxation. A better approach will be to compare the Country’s debt profile with the government revenue. With these additional borrowings, Nigeria’s total debt will be hitting some N15 trillion.

Already Debt service amount will increase from N954 billion in 2015 budget to N1.475 trillion in 2016. The 2016 budgeted amount for Debt service represents a 55% increase from the 2015 budgeted amount for Debt service. In fact the picture of the debt burden will become clearer when the Debt service budgeted amount in 2016 is expressed as a percentage of capital expenditure, recurrent expenditure and total revenue.

The budgeted amount for Debt service is 80% of the capital expenditure budget; 56% of the Non-Debt recurrent expenditure; 35% of total recurrent expenditure and 24.3% of the total budget. In essence, a quarter of the 2016 budget is actually for debt service alone. A more worrisome picture is that N38.2 of every N100 of the budgeted revenue in 2016 will be spent on Debt servicing alone. This is huge and deeply troubling especially when you consider that even the budgeted revenue of N3.86 trillion is very ambitious!

It is therefore our considered opinion that the 2016 Federal budget may not be achievable and our hopes that capital expenditure of N1, 8 trillion will be spent in 2016 may unfortunately be dashed except if the government makes contingency arrangements.

The truth is that a huge part of our recurrent expenditure is fixed in the shorterm and meeting debt service obligations is usually a priority. Therefore any shortfall in the revenue projections will either be met through more borrowing or a cut in the 2016 capital expenditure budget. This poses a serious concern to our Congress and we need the Minister of Finance to provide assurances to the nation about how the country intends to deal with these issues.

Huge Special Intervention Funds
The federal government provided for N500billion for special Intervention projects (Recurrent N300Billion and Capital N200 Billion). This is very laudable especially considering some of the named activities for these funds. However it is important that during the Budget defence efforts will be made to breakdown these figures further and more importantly explain how the funds will be applied effectively to ensure that they are not corruptly diverted, misused or applied for political patronage. Also the amount is more than the combined capital expenditure provisions of the following 18 federal ministries namely: Defence; Interior; Agriculture; Federal Capital Territory Administration; Education; Water Resources; Health; Science And Technology; Niger Delta; Mines And Steel Development; Foreign Affairs; Petroleum Resources; Industry, Trade And Investment; Communication Technology; Information & Culture; Labour And Employment; Environment; And Youth & Sports Development.

Lean provision for institutions that fight corruption:
The budget provision for the institutions that are expected to fight corruption and financial crimes is very small. This is very worrisome considering that the government’s main agenda is the fight against corruption and recovery of looted funds, which in a constitutional democracy would require diligent prosecution of suspects in the courts of law. The experience of the past show that while suspected corrupt officials are able to enlist the services of the most experienced Senior advocates (SANs) the EFCC, ICPC, Code of Conduct Tribunals are unable to do so , and as a result have not been able to successfully prosecute corrupt government officials beyond the initial media hype. We could not locate the budget provision for the Economic and Financial Commission and we be glad to know the figure for EFCC. However the amounts for the other agencies are:

Code of Conduct Bureau 1,794,596,920 Recurrent Exp
Code of Conduct Bureau 430,001,179 Capital Exp
Code of Conduct Tribunal 434,319,234 Recurrent Exp
Code of Conduct Tribunal 350,000,000 Capital Exp
Fiscal Responsibility Commission 340,394,768 Recurrent Exp
Fiscal Responsibility Commission 153,671,000 Capital Exp
ICPC 4,277,699,554 Recurrent Exp
ICPC 340,679,241 Capital Exp
Public Complaints Commission 2,000,000,000 Recurrent Exp Huge Budget for National Assembly:

The budget provisions for National Assembly is some N175billion made up of Statutory transfers of N115billion and Provisions for Constituency/Special intervention of N60 billion. This amount is huge especially considering the lean resources of the federal government and the concerns by Nigerians.

THE PROPOSED FIVE PER CENT NATIONAL SECURITY TAX
We condemn the proposed five per cent National Security Tax Fund Bill which is currently before the National Assembly. The Bill in Section 1(2) seeks to provide for a five per cent tax on goods and services to be charged by companies registered in Nigeria; while subsection 3 of the same section provides that the tax shall be charged on the assessable profits of a company registered in Nigeria.

The gloomy business environment in Nigeria which is bedevilled with multiple taxation will only become worse if this bill is passed into law. Also, this bill if passed into law will lead to inflation and its other multiplier effects in Nigeria. CONCLUSION
The Congress in Rivers state wishes all Rivers People and Nigerians a very fruitful and joyous celebration this season and urge all to look forward to 2016 with hope and with renewed determination and vigour to play our constitutional roles in ensuring that Rivers State and Nigeria become great.

We look forward to peaceful, free, fair and credible re-run elections in Rivers state in the first quarter of 2016.

As we have aforementioned, the 2016 budget remains a laudable one. However until the concerns we have raised in this New Year message are addressed, it remains very doubtful if the budget will be implemented as planned.

Permit me to inform you that this will be my last New Year Message as the State Chairman of the Trade Union Congress of Nigeria (TUC) Rivers State. As soon as a date is agreed for the 5th State Delegates’ Conference of TUC Rivers State, we will inform Congress and the good people of Rivers State.

Let me earnestly thank the affiliates of TUC in Rivers State and members of our Congress for the unparralled loyalty and support to my leadership especially in this very difficult and trying period. I am proud of you! Of course, in the tradition of Congress and in line with our constitution, when I handover, I will not be far away. I will still be available to support the new leadership as Ex-officio!

Let me on behalf of the leadership of TUC Rivers State; pledge to continue to stand by the workers and the ordinary people as well as on our original ideology as a mass movement.

On behalf of the Trade Union Congress of Nigeria (TUC) Rivers State Council once again, we wish you all a peaceful end of year 2015 as well as a peaceful, productive and rewarding 2016.
Aluta Continua! Victoria Acerta!!
Forward ever!!! Backward never!!!!
Solidarity forever!!!!

Onuegbu is the chairman, Trade Union Congress (TUC), Rivers
State

CONCLUDED