The Federal Government, on Tuesday conceded that the country does not need to fall into a situation where a debt relief package will be activated like in 2005, when the Paris Club of creditors wrote off $18 billion or 60 per cent of the nation’s $30 billion debt while lamenting the growing debt profile of the country.
Addressing members at the resumed sitting of the House of Representatives Ad hoc Committee on Probe of non-implementation of the 2015 Capital Budget, Permanent Secretary, Ministry of Finance, Mrs. Anastasia Nwaobia, said the Federal Government alone owes N8.396 trillion in local debts.
She put total external debts of the federal and state governments at $10.31 billion by the end of June 2015, representing a rise of about $850 million or 8.98 per cent from the total of $9.46 billion at the end of March.
Specifically, she said “external debt as at June 30, 2015 stood at $7.74 billion and $3.42 billion for states and the FCT; bringing it to the total amount of $10.31 billion,” aggravated by the crisis of currency depreciation, high cost of living, interest rates and inflation.
Nwaobia, who is on the entourage of President Muhammadu Buhari to Paris, France, and was represented by the Director-General of the Budget Office of the Federation, Alhaji Aliyu Yahaya Gusau, also said the situation was worsened by the nation’s dwindling revenue.
That is why, she continued, total revenue was N1.47 trillion as at second quarter of 2015, out of the N3.45 trillion projected for the period, representing a N1.98 trillion or 57.39 per cent fall in revenue within the period. Aggregate expenditure as at the end of June 2015 however stood at N2.113 trillion out of the N4.94 trillion projected for the 2015 fiscal year, she said.
The committee was also informed that the sum of N194.492 billion or 34.89 per cent of the N557 billion appropriated for capital project had been released as at September 15, 2015.
“The drop in oil revenue and payment of petroleum subsidies has contributed to the depletion of the Excess Crude Account to about $4 billion by end of 2014 and $2.08 billion as at June 2015,” the Perm Sec added.
On debt management, she said the sum of N502.122 billion was approved for domestic borrowing and N380 billion as external borrowing, both of which had been fully raised and domiciled into the Consolidated Revenue Account even before the immediate past administration of President Goodluck Jonathan ended.
To avert an impending danger, she stressed the need to closely monitor the nation’s debt service to revenue ratio, “given that it was 19.63 per cent by the end of June 2015, against the cognate arbitrary threshold of 28 per cent.
Nwaobia added that the global economic growth forecast was projected at 3.3 per cent as precipitated by falling oil price and currency depreciation in major world economies such as balancing in China, Europe and fluctuating stock values in major world markets.
She said Nigeria’s economy in the same vein is experiencing a very slow start to the fiscal year with growth forecast dropping to less than three per cent of projected growth.
Mrs. Nwaobia added that “the attempted delisting of Nigeria from the JP Morgan index watch has further heightened the fear of currency devaluation, import restriction and inflation”.