Nigeria’s debts rise to over N19 trillion
• Lawmakers uncover unremitted $15b revenue
Nigeria’s debt stock rose to N19.15 trillion ($62.91 billion at the official exchange rate of N304.4) as at March 31, 2017, against N17.36 trillion at the end of December 31, 2016.
This shows an increase of N1.79 trillion ($5.88 billion at N304.4 per dollar) in three months, arising from new deals in efforts to overcome the 2016 budget deficit put at N2.2 trillion.
The development shows that the gains of Nigeria exiting the Paris Club and the Brettons Wood institutions debt under the former President Olusegun Obasanjo’s administration have been eroded and consequently, the future of Nigerians has been mortgaged as the people will have to labour to pay off the debts.
According to the Debt Management Office (DMO), parts of these deals include $1 billion in February and $500 million in March from Eurobond sales.
Consequently, Nigeria’s debt service bill recorded a corresponding increase from both the domestic and external sides of the obligations, despite the faltering revenue flow.
The President of the Chartered Institute of Taxation of Nigeria, Dr. Teju Somorin, lamented that the country’s revenue-to-interest payment had fallen to a record low, made worse by poor behaviour towards payment of tax.
The country’s revenue-to-debt ratio and revenue-to-interest payment have long elicited local and international concerns, even as multilateral institutions like World Bank and International Monetary Fund (IMF) have declared it unsustainable, calling for the deepening of tax collection as immediate support.
On the domestic debt, made up of those of states and the Federal Government, put at N14.9 trillion, no less than N474.1 billion has been paid out as interest in the first three months of the year – N180.1 billion in January; N106.4 billion in February; and N186.9 billion in March.
Similarly, the external debt component at $13.8 billion as at March 31, was in contrast to $11.40 billion by December 31, 2016, and has consumed about $127 million (about N387 billion) in the period under review.
The N179.15 trillion quoted by the debt manager is the equivalent of a cumulative national fiscal appropriation for 2017 at N7.2 trillion; 2016 at N6.6 trillion; and 2015 at N4.6 trillion, plus the supplementary budgets.
Specifically, of the N19.15 trillion total debt captured by the DMO, FGN Bonds accounted for N8.2 trillion, representing 68.3 per cent of total domestic debt; Nigerian Treasury Bills accumulated N3.6 trillion; Treasury Bonds, N190.9 billion; and the recently inaugurated FGN Savings Bond, N2.1 billion, representing 30.1 per cent, 1.6 per cent, and 0.02 per cent of the total domestic debt.
Meanwhile, the House of Representatives has uncovered $15 billion allegedly not remitted as revenue into the Federation Account.
Members of the Abdulrazak Namdas-led ad hoc committee probing into the alleged theft of $17 billion from undeclared crude oil and liquefied natural gas (LNG) from 2011 -2014 claimed that they arrived at the conclusion after perusing two separate documents submitted by the Nigeria National Petroleum Corporation (NNPC).
NNPC Chief Operating Officer (COO), Mr Rabiu Bello who appeared before the lawmakers admitted that there were discrepancies in the documents before the committee.
He, however, said earnings from crude oil sales were duly lodged in the Central Bank of Nigeria (CBN), adding that financial deals were audited and accounted for by various organs including the office of the auditor-general of the federation.
The CBN Governor, Godwin Emefiele, represented by an official of the apex bank, Mr. Jack Ukitetu explained that the accountant- general of the federation approves and determines the disbursement of monies accruing into the Excess Crude Account.
Ukitetu, who stated that before 2006, the CBN collected the money on behalf of government’s agencies and remitted it into the Federal Reserve Account in New York and charged 0.25 per cent, however, noted that after 2006, the oil companies paid directly what was due to the government.
According to him, the CBN collects 0.25 per cent via forex allocation and does not charge one kobo as its deductions are made from central sales.
Namdas, who threatened that the committee would not hesitate to submit its report to the House without the inputs of major Ministries, Departments and Agencies (MDAs) which failed to honour the invitation of the committee, directed the CBN and NNPC to submit the audited report of the oil and gas account showing the remitted funds into the Federation Account between 2011 and 2014.
The NNPC was also directed to submit the bill of laden relating to the 974,721 barrels of crude oil lifted on 20th October 2011; 961,963 barrels lifted on the 10th October 2011; 974,935 barrels lifted on the 9th July 2011 as well as 974,953 lifted on the 18th July 2011 but were not declared.
The lawmakers also requested a report of the reconciliation conducted by NNPC and Federal Inland Revenue Service (FIRS) as well as the list of oil off-takers for 2013 and 2014 and details of the companies that paid oil tax between 2011 and 2014. The NNPC will also provide the Letter of Credits (LCs) of all the monies paid into the Federation Account within the period under review.
The committee also grilled the heads of FIRS and the Nigeria Customs Service (NCS) for not doing enough in the supervision of crude oil exports. The committee particularly condemned both outfits for relying solely on declarations by the NNPC.
The lawmakers, who grilled the FIRS deputy director Tax Policy Department, Gabriel Ogunjemilusi, on the issue expressed concern that the FIRS was powerless regarding assessing the NNPC claims on crude oil exports.