Connect with us

Business

Buhari Govt Spends N11.679tn On Debt Servicing

Buhari Govt

Buhari govt spends N11.679tn on debt servicing in five years –Report

The Centre for Social Justice (CSJ) a civil organization has revealed that Nigeria, under the leadership of president Muhammudu Buhari spent N11.679 trillion servicing debts in the last five years.

The group stated this during the presentation of its report titled 2022-2024 Medium Term Expenditure Framework and Fiscal Strategy Paper,” in Abuja on Monday,

According to the group the amount which was spent between 2015 and 2020 is very concerning considering only N8.31trillion was expended on capital/development expenditure.

The report titled, ‘For every N100 earned, Nigeria spent N82 paying debt in 2020’ shows that in 2020, Nigeria had budgeted 2.95 trillion to service debt but ended up spending N3.2 trillion and this is 82 percent of the retained revenue (N3.9 trillion) in 2020.

However, breakdown of the debt service amount from CSJ, showed that in 2015 and 2016, N953.620 billion and N1.475 trillion, respectively, were spent on debt service, while N1.841 trillion and N2.203 trillion went into the same line item in 2017 and 2018, respectively.

The sums of N2.254 trillion and N2.951 trillion went into debt service in 2019 and 2020, respectively.

The N11.679,845,205, 997 five-year debt service profile (2015-2020) also translated to a yearly average of N1.386 trillion.

Speaking at the presentation of the report, the Lead Director of CSJ, Eze Onyekpere, stated that Nigeria’s debt had also been increasing in double digits year-after-year since 2015, with the highest increase recorded between 2015 and 2016.

Onyekpere, citing the Debt Management Office (DMO) statistics, also noted that public debt stock stood at N12,603 trillion in 2015, N17.360 trllion in 2016, and N21.725 trillion in 2017.

“In 2018, 2019 and 2020, public debt stood at N24.387 trillion, N27.401 trillion, and N32.915 trillion, respectively.

“The highest increase was occurred between 2015 and 2016.

“Between 2015 and 2020, Nigeria’s public debt increased by 161 percent, indicating a yearly average increase of 37.74 percent,” he added.

Onyekpere also during his presentation also expressed worry on the future of debt sustainability of the country.

“The Medium-Term Debt Management Strategy (MTDS) 2020-2023 shows that the government has designed 70 percent for domestic debt and 30 percent for external debt while total debt as a ratio of the GDP has been increased from 25 percent to 40 percent; average tenure of debt portfolio is a minimum of ten years.

The trajectory, he noted, would lead to debt service to revenue increasing in the medium term while capital expenditure as a percentage of total federal government spending would be decreasing in the medium term.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

two × one =

Business

DMO Issues Two FGN Savings Bonds At N1,000/unit

The Debt Management Office (DMO) has announced its Dec. issuance of two Federal Government of Nigeria (FGN) Savings Bonds at N1,000 per unit.

According to a statement by the DMO, the first offer is a two-year FGN Savings Bond due on Dec. 14, 2022, at an interest rate of 12.255 percent per annum.

The second one is a three-year FGN Savings Bond due on Dec. 14, 2025, at a 13.255 percent interest rate per annum.

It said that the opening date for the issuance of the bonds is Dec.5, the closing date is Dec. 9, the settlement date, is Dec. 14 while coupon payment dates are March 14, June 14, Sept. 14, and Dec. 14.

“They are issued at N1,000 per unit subject to a minimum subscription of N5,000 and in multiples of N1,000 thereafter, subject to a maximum subscription of N50 million.

“Interest is payable quarterly, while bullet repayment is made on the maturity date, ” it said.

It added that FGN savings bonds qualify as securities in which trustees can invest under the Trustee Investment Act.

“They qualify as government securities within the meaning of the Company Income Tax Act and Personal Income Tax Act for tax exemption for pension funds amongst other Investors.

“They are listed on the Nigerian Stock Exchange and qualify as liquid assets for liquidity ratio calculation for banks,” it said.

The statement said they were backed by the full faith and credit of the Federal Government of Nigeria, and charged upon the general assets of the country.

Continue Reading

Business

DMO Says It has Raised N130bn From Sukuk For Key Road Projects

The Debt Management Office (DMO) says it raised N130 billion from its N100 billion sovereign al ’Ijarah sukuk opened on November 21, 2022.

DMO, in a statement on Monday disclosed that the offer of N100 billion was “upsized to N130 billion due to the over 165 percent subscription level”.

The Sukuk is a strategic initiative that supports infrastructure development, promotes financial inclusion and deepens the domestic securities market.

Since the establishment of the initiative in September 2017, Nigeria has issued four sovereign sukuk: 2017 (N100 billion), 2018 (N100 billion), 2020 (N162.557 billion), and 2021 (N250 billion).

According to the statement, this year’s total sovereign sukuk issuance moved to N742.557 billion.

“The Debt Management Office (DMO) is pleased to inform the public of the successful conclusion of the issuance of N100 billion sovereign al ’ijarah sukuk. The offer for N100 billion opened on November 21, 2022, and was supported by wide public sensitisation to encourage subscription from diverse investors, particularly the retail investors,” the statement reads.

“The initial offer size of N100 billion was upsized to N130 billion due to the over 165 percent subscription level. The Sukuk was issued at a rental rate of 15.64 percent per annum. This brings the total sovereign sukuk issuance to N742.557 billion as at date.”

Continue Reading

Business

CBN Limits Withdrawal To N100,000 Weekly

The Central Bank of Nigeria (CBN) on Tuesday slashed the cash withdrawal by an individual to N100,000 per week by an individual.

The apex bank also fixed N500,000 as the amount a company can withdraw in a week.

By this new policy, account holders can only withdraw a maximum of N100,000 weekly through Automated Teller Machine (ATM), subject to a maximum of N20,000 daily withdrawal.

Under the new policy, which is to take effect from January 9, 2023, the maximum cash withdrawal via Point of Sale (POS) shall also be N20,000 daily.

This was contained in a circular issued by the CBN on Tuesday, signed by director of banking supervision, Haruna Mustafa and addressed to deposit money banks and other financial institutions.

According to the circular, deposit money banks and other financial institutions are also mandated to ensure that over-the-counter cash withdrawals by individuals and corporate entities do not exceed N100,000 and N500,000, respectively, per week.

It further indicated that all cash withdrawals in excess of the stated limits will attract processing fees of 5 per cent and 10 per cent respectively.

The new policy also states that third party cheques in excess of N50,000 shall not be eligible for over the counter payment, while extant limits of N10,000,000 on clearing cheques subsist.

“Only denomination of N200 and below shall be loaded into the ATMs.

“In compelling circumstances not exceeding once a month, where cash withdrawals above the prescribed limits is required for legitimate purposes, such cash withdrawals shall not exceed N5,000,000 and N10,000,000 for individuals and corporate organisations respectively, and shall be subject to the references processing fees in (1) above, in addition to enhanced due diligence and further information requirements,” the circular stated.

Continue Reading
Advertisement

Trending