Connect with us

Featured

FG Exceeds Loan Target By N1.12trn, Borrows N5.3trn

Published

on

The Federal Government exceeded its borrowing by N1.15trillion for the period between January and August, 2022.
A copy of the public presentation of the 2023 proposed budget by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, showed that the Federal Government planned to borrow N6.10trillion in 2022.
A breakdown shows that the Federal Government planned to get N3.53trillion from domestic creditors and N2.57trillion from foreign creditors.
According to the document, the Federal Government estimated that it would borrow N4.07trillion between January and August, 2022.
However, the Federal Government accumulated N5.33trillion debt within the period under review, which is N1.15trillion higher than the expected N4.07trillion planned debt.
A further breakdown showed that the Federal Government borrowed N4.82trillion from domestic creditors and N510.21billion from foreign creditors.
The debt from domestic creditors includes the Federal Government’s borrowing from the Central Bank of Nigeria through the Ways and Means Advances.
Ways and Means’ Advances are loan facilities through which the CBN finances the shortfalls in the government’s budget.
The Federal Government recently borrowed a total of N4.61trillion from the Central Bank of Nigeria through Ways and Means Advances between January and August, 2022.
This means that majority of the Federal Government’s domestic debt came from its debt to the CBN.
The CBN said on its website that the Federal Government’s borrowing from it through the Ways and Means Advances could have adverse effects on the bank’s monetary policy to the detriment of domestic prices and exchange rates.
“The direct consequence of central banks’ financing of deficits are distortions or surges in monetary base leading to adverse effects on domestic prices and exchange rates i.e. macroeconomic instability because of excess liquidity that has been injected into the economy,” it said.
The World Bank had, last November, warned the Nigerian government against financing deficits by borrowing from the CBN through the Ways and Means Advances, saying this put fiscal pressures on the country’s expenditures.
Despite warnings from experts and organisations, the Federal Government has kept borrowing from the CBN to fund budget deficits.
Also, the N22.07trillion owed the apex bank by the Federal Government is not part of the country’s total public debt stock, which stood at N42.84trillion as of June 2022, according to the Debt Management Office.
The country’s debt rose by N30.72trillion between July, 2015 and June, 2022, according to data released by the DMO.
According to the DMO statistics, Nigeria’s total debt as of June 30, 2015, stood at N12.12trillion.
By June 30, 2022, the figure had risen to N42.84trillion, which showed an increase of 253.47per cent.
Despite the high increase in debt over the years, the government still plans to borrow N8.4trillion in 2023.
Experts have kicked against the Federal Government’s proclivity for debt, which they have described as unsustainable.
An Abuja-based policy think tank, Agora Policy, said Nigeria’s debt was unsustainable and put the country in a perilous situation due to the high cost of debt servicing.
The group advised the government to deepen and diversify sources of revenue, re-calibrate expenditure to spend smartly, and invest efficiently.
A former President of the National Accountants of Nigeria, Dr Sam Nzekwe, agreed that Nigeria’s debt was unsustainable.
He said, “The debt is huge. If you look at the budget, you will see that a huge sum of money is used to service debts. This is just the debt service charge. We are yet to talk about the principal.”
He also said that instead of focusing on the debt to GDP ratio, the focus should be on debt service to revenue ratio.
He further noted that the country had a revenue problem.
A development economist, Dr AliyuIlias, criticised the government for its constant reliance on borrowing, which was not healthy for the economy.
He further urged the government to seek better ways of generating revenue rather than persistently borrowing.
However, the finance minister, when she appeared before the House of Representatives Committee on Finance, last week, explained that the over-borrowing was a deliberate plan to ensure that money was released early for capital projects.
She said, “We are borrowing faster than what we had prorated. It was a conscious decision to make sure we have funds early enough to release for the implementation of capital projects.”
Meanwhile, the amount budgeted for recurrent expenditures has increased from N2.61trillion spent in 2015 to N8.27trillion in the proposed 2023 budget, according to data from the Budget Office of the Federation.
This shows an increase of N5.66trillion or 216.86per cent in six years, fuelling concerns over the rising cost of government overheads amid declining revenue and weakening economy.
Analysis revealed that recurrent expenditure recorded significant increases each year during the period under the review.
The former President, Dr Goodluck Jonathan, approved a N4.49trillion budget for 2015, which included a N2.61trillion recurrent expenditure.
Capital expenditure was N557billion, while money budgeted for debt service was N953.62billion.
There was a fiscal deficit of N1.08trillion.
The recurrent expenditure rose slightly by 1.53per cent or N40billion to N2.65trillion in 2016, out of a total expenditure of N6.06trillion.
Capital expenditure was N1.59trillion, while money budgeted for debt service was N1.48trillion.
There was a fiscal deficit of N2.2trillion.
In 2017, it rose to N2.99trillion, representing an increase of N340billion or 12.83per cent.
Out of a total expenditure of N7.44trillion, capital expenditure was N2.18trillion, while money budgeted for debt service was N1.66trillion.
There was a fiscal deficit of N2.36trillion.
In 2018, recurrent expenditure rose by N520billion or 17.39per cent, raising the total recurrent expenditure to N3.51trillion.
Out of a total expenditure of N9.12trillion, capital expenditure was N2.87trillion, while money budgeted for debt service was N2.01trillion.
There was a fiscal deficit of N1.95trillion.
The following year, the recurrent expenditure increased by N540billion or 15.38per cent to N4.05trillion.
Out of a total expenditure of N8.91trillion, capital expenditure was N2.09trillion, while money budgeted for debt service was N2.25trillion.
There was a fiscal deficit of N1.95trillion.
The recurrent expenditure was N4.84trillion in 2020, out of a total expenditure of N10.59trillion.
This shows an increase of N790billion or 19.51per cent.
Capital expenditure was N2.47trillion, while money budgeted for debt service was N2.7trillion.
There was a fiscal deficit of N2.28trillion.
However, the increase in 2020 may be attributed to the inclusion of the new national minimum wage in the budget.
In the 2022 budget, the recurrent expenditure hit N6.91trillion, representing an increase of N1.27trillion or 22.52per cent.
Out of a total expenditure of N17.13trillion, capital expenditure was N5.47trillion, while money budgeted for debt service was N3.88trillion.
There was a fiscal deficit of N6.26trillion.
President MuhammaduBuhari (rtd), recently presented the proposed 2023 budget to the National Assembly.
The proposed 2023 budget shows that the proposed recurrent expenditure is N8.27trillion, which is an increase of N19.68per cent or 1.36trillion from the previous year.
Out of a total expenditure of N20.01trillion, capital expenditure was N4.93trillion, while money budgeted for debt service was N6.65trillion.
There was a fiscal deficit of N10.7trillion.
The 2023 recurrent expenditure represents 41.33per cent of the nation’s entire budget and is the single largest element of the budget.
It is also N3.78billion more than the total expenditure for 2015.
From the 2023 recurrent (non-debt) expenditures, personnel costs gulped N4.08trillion; pensions, gratuities and retirees’ benefits took N721.46billion, while overheads cost N443.28billion.
Within the years of the Buhari’s regime, including 2015, a total of N38.82trillion has been budgeted for recurrent expenditures.
This total exceeds the N20.01trillion total budget proposed for the 2023 fiscal year.
Experts have lamented the constant increase in the nation’s cost of governance.
In May 2021, the Federal Government, through the Minister of Finance, Zainab Ahmed, had said it was working to reduce the high cost of governance by doing away with unnecessary expenditures, which might include salary cuts for workers.
However, the increase in recurrent expenditures in the 2023 budget suggests the government may have backpedalled on the plan.
Economic and financial experts have expressed concerns over what they described as significant increases in government expenditure, saying they were worrisome because a large chunk of government revenue had been allocated to recurrent expenditure instead of capital projects that drove economic growth.
The Registrar and Chief Executive Officer, National Institute of Credit Administration, Prof Chris Onalo, has stressed the need for the government to streamline its expenditure in order to manage its debt profile.
He said, “Everybody is concerned about the rising debt profile. And the reason it is going in that direction is because first, our recurrent expenditure is too big. When you borrow money, you don’t borrow to pay salaries. You don’t borrow to finance recurrent expenditure. That is where we have the biggest problem.
“The size of our civil service needs to be trimmed down. Some of the ministries have to be allowed to go. And then, we need a very serious audit of the Federal Government’s workforce. And until we do that, we will not be able to run the civil service system transparently. The government expenditure profile needs to be streamlined very seriously.”
An Associate Professor of Economics at Pan Atlantic University, Dr OlalekanAworinde, recently linked the development to rising salaries and the upcoming election.

Featured

FG To Seize Retirees’ Property Over Unpaid Housing Loans

Published

on

The Federal Government Staff Housing Loans Board says it has begun the compilation of list of retired civil servants who have defaulted on the full repayment of housing loans obtained.
Head of Information and Public Relations, FGSHLB, Mrs Ngozi Obiechina, disclosed this in a statement in Abuja, yesterday.
Obiechina quoted the Executive Secretary of the Board, Mrs Salamatu Ahmed, as saying that the move was aimed at recovering mortgaged properties from retirees who failed to meet their loan obligations.
Ahmed noted that the decision followed a recent memo issued by Mrs Patience Oyekunle, Permanent Secretary, Career Management Office, Office of the Head of the Civil Service of the Federation.
According to her, the memo reminded public servants of the mandatory requirement to obtain a Certificate of Non-Indebtedness to the FGSHLB and MDA Staff Multipurpose Cooperative Society as a precondition for retirement.
The Executive Secretary said that the board would take necessary legal steps to repossess properties where applicable, in line with the terms of the loan agreements.
She said this was in line with the provisions of the Public Service Rules 021002 (p), issued by the Office of the Head of the Civil Service of the Federation.
“I am directed to bring to your attention the provision of Public Service Rule (PSR) 021002 (p), which mandates all public servants to obtain a Certificate of Non-Indebtedness as a prerequisite for retirement.
“The Federal Government will commence the seizure of mortgaged properties belonging to retiring federal public servants who have failed to fully repay housing loans obtained from the board,” she said.
Ahmed explained that the FGSHLB reserves the legal right to repossess any mortgaged property in cases where a public servant exits service without fully repaying the loan.
She reiterated that the directive also applied to already retired officers who were still indebted.
She urged all affected public servants to regularise their loan status and obtain the required clearance certificate without delay.
“The board is currently compiling a list of such retirees, which will be forwarded to relevant regulatory agencies for debt recovery.
“The FGSHLB remains committed to enforcing compliance and ensuring proper loan recovery procedures are followed, “ she added.

Continue Reading

Featured

FG Begins Induction For New Permanent Secretaries, Accountant-General

Published

on

The Federal Government has kicked off a three-day induction programme for newly appointed Permanent Secretaries and the Accountant-General of the Federation, aimed at equipping them for strategic leadership and effective policy implementation.
The induction, according to a statement yesterday by the Director, Information and Public Relations, Federal Ministry of Information and National Orientation, Eno Olotu, which commenced on Wednesday, is being held at the National Counter Terrorism Centre in Abuja.
Speaking at the opening session, the Head of the Civil Service of the Federation, Mrs. Didi Esther Walson-Jack, congratulated the new appointees and described their roles as pivotal to governance and national development.
“Permanent Secretaries are the engine room of the government. They are critical to driving policy implementation, institutional performance, and reform across the service”, she said.
The Federal Government has kicked off a three-day induction programme for newly appointed Permanent Secretaries and the Accountant-General of the Federation, aimed at equipping them for strategic leadership and effective policy implementation.
The induction, according to a statement yesterday by the Director, Information and Public Relations, Federal Ministry of Information and National Orientation, Eno Olotu, which commenced on Wednesday, is being held at the National Counter Terrorism Centre in Abuja.
Speaking at the opening session, the Head of the Civil Service of the Federation, Mrs. Didi Esther Walson-Jack, congratulated the new appointees and described their roles as pivotal to governance and national development.
“Permanent Secretaries are the engine room of the government. They are critical to driving policy implementation, institutional performance, and reform across the service”, she said.
“The expectations are high, and the responsibility is immense. But with commitment and teamwork, we can deliver a more efficient, accountable, and citizen-centred public service.
“This final lap of FCSSIP 25 calls for urgency, accountability, and strategic focus. You must translate vision into measurable results,” she stated.
In her welcome address, the Permanent Secretary, Career Management Office, Mrs. Fatima Sugra Tabi’a Mahmood, described the programme as a strategic investment in leadership capacity and institutional effectiveness.
The sessions featured expert-led discussions, simulations, and strategic briefings facilitated by a distinguished faculty, including Engr. Suleiman Adamu, former Minister of Water Resources; Dr. Hadiza Bala Usman, Special Adviser to the President on Policy and Coordination; Mrs. Beatrice Jedy-Agba, Solicitor-General of the Federation and Permanent Secretary, Federal Ministry of Justice; Alh. Yusuf Addy, retired Federal Director; Alhaji Bukar Goni Aji, former Head of the Civil Service of the Federation; Amb. Mustapha Lawal Suleiman, Mr. Adesola Olusade, and Dr. Ifeoma Anagbogu, all retired Permanent Secretaries.
Participants include Dr. Obi Emeka Vitalis, Mrs. Fatima Sugra Tabi’a Mahmood, Mr. Danjuma Mohammed Sanusi, Mr. Olusanya Olubunmi, Dr. Keshinro Maryam Ismaila, Dr. Akujobi Chinyere Ijeoma, Dr. Umobong Emanso Okop, Dr. Isokpunwu Christopher Osaruwanmwen, Mrs. Oyekunle N. Patience, Dr. Kalba U. Danjuma, Mr. Nadungu Gagare, Mr. Onwusoro I. Maduka, Dr. Usman Salihu Aminu, Mr. Ogbodo Chinasa Nnam, Mr. Ndiomu Ebiogeh Philip, Dr. Anuma N. Ogbonnaya, Mr. Adeladan Rafiu Olaninre, and Mr. Mukhtar Yawale Muhammed, alongside the Accountant-General of the Federation, Mr. Shamseldeen Babatunde Ogunjimi.
The induction programme will feature sessions on public sector leadership, policy delivery, ethics in service, digital transformation, and performance management.

Continue Reading

Featured

NNPCL To Undergo Forensic Audit Soon -FG

Published

on

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has announced that a forensic audit of the Nigerian National Petroleum Company Limited (NNPCL) will begin soon.
Edun revealed this at the ongoing Nigerian Investor Forum, held alongside the IMF/World Bank Spring Meetings in Washington DC.
The minister explained that the recent changes in the NNPCL management are part of a broader effort by the Federal Government to clean up and examine the company closely.
While addressing top global investors, including representatives from J.P. Morgan, Edun shared key reforms the government has introduced to revive the economy and restore investor confidence.
He told the investors that the government’s bold economic steps have laid a strong foundation to attract private investment.
He stated, “Our goal is not just to maintain this momentum, but to accelerate it. We are targeting seven per cent annual growth, and we believe the policies we have implemented have laid the groundwork to achieve this.”
Edun highlighted that President Bola Tinubu’s administration has rolled out major reforms that are already making a difference.
He added that the Nigerian economy grew by 3.84 per cent in the fourth quarter of 2024 and recorded a 3.4 per cent growth for the year.
Edun further stressed the importance of the reforms, describing them as “unprecedented,” adding that, “We said we would do it, and now we have done it. This time, we’re staying the course.”
He pointed out signs of progress such as lower budget deficits, a better trade balance, and a more stable exchange rate.
He also said that the focus is now on growing key sectors, especially agriculture.
According to Edun, agriculture is at the top of the government’s agenda, with the aim of improving food supply and increasing productivity.
“We aim to close the food supply gap, not by importing more, but by enabling domestic producers to scale and innovate,” he said.
On infrastructure, Edun revealed that the government has rolled out 90,000km of fibre optic cable to improve internet access.
He said this move is crucial for supporting young Nigerians and tech startups.
He also noted that 4,000km of roads have been offered for private sector participation, with the first 1,000km already approved for construction.

Continue Reading

Trending