Okonjo-iweala: Jonathan Incurred $21bn Of $63bn National Debts

 
Coordinating Minister for the Economy (CME) and
Minister of Finance, Dr. Ngozi Okonjo-Iweala, on
Saturday put the nation’s total debt stock at $63.7
billion, which encompasses multilateral as well as

domestic loans by successive federal and state
governments since 1960. She said that of this figure,
$21.8 billion was incurred under the outgoing
government of President Goodluck Jonathan.
Her disclosure is coming on the heels of remarks by
Vice President-elect Yemi Osinbajo that the outgoing
administration of President Jonathan will be leaving a
huge debt of $60 billion for the incoming
administration of Muhammadu Buhari.

Speaking during an interactive session with finance
correspondents in Abuja on Saturday, she said it was
wrong to blame the Jonathan administration for the
huge debt stock which she said was accumulated
over a long period of time by several administrations.
Giving insight into the $21.8 billion debts incurred
under the Jonathan government the minister said the
debts were made up of $18 billion domestic
component and $3.7 billion external component.
According to her between 2007 and 2011, a debt of
$17.3 billion was recorded while between 2012 and
2015, the debt incurred stood at $18.1 billion.

She explained that the leap in the debt profile
between 2012 and 2015 was triggered off by the 53
per cent wage increase implemented by the late
Umaru Yar’Adua administration in a fell swoop.

This, she said, skyrocketed government’s borrowing
from N524 billion to over N1 trillion in order to meet
the salary increase, adding that the country’s
domestic debt increased by $18.1 billion mainly
because of the 53 per cent increase in the pay of civil
and public servants.

The minister stated that at the time of the salary
increase, she was still with the World Bank, adding
that she had written and warned on the
consequences of acquiescing to such a huge
increase.

Absolving the Jonathan administration of blame, the
minister said the government had in deed taken a
careful and meticulous approach to managing the
nation’s debt, noting that the present administration,
for the first time in the nation’s history, retired a
domestic debt of N75 billion in 2013.

Commenting on the $63.7 billion debt stock, the
minister said $9.7 billion or 15 per cent is external
while $54 billion or 85 per cent represents domestic
debt. She added that the states’ share of the $9.7
billion external debt is 33 per cent while the states’
share of the $54 billion is 20 per cent.

Okonjo-Iweala pointed out that Nigeria still has one
of the lowest fiscal deficits in the world with debt to
GDP ratio of about 1.5 per cent of the budget, adding
that the government has used the right tools to
manage the economy and has only borrowed at very
low concessionary rates to fund important
infrastructure initiatives in agriculture, aviation,
power, roads, health, and water resources, among
others.
The minister added that where the country should
watch carefully is the debt service to revenue, which
is at 22 per cent.
She argued that it was wrong to “to characterise the
Jonathan administration as leaving $63 billion debt
since the country’s debt stock was accumulated over
a long time by several administrations.

Commenting on the lingering fuel scarcity, the
minister said most of the marketers were
blackmailing the government and by extension,
Nigerians.
According to her, Nigerians should rise up and ask
questions why the marketers reneged on their
promise a fortnight ago after they openly told the
entire country that they had sorted out their
differences with the government and that they were
going to end the scarcity.

She said soon after that open declaration, the
marketers went back and shut down their supply
chains, noting that they had requested her to sign
that government was going to pay them N159 billion
as foreign exchange differentials out of the N200
billion claims they were making.

The Finance Minister stated that the marketers, who
had earlier agreed with the setting up of an ad hoc
committee made up of their representatives, those of
Petroleum Product Pricing Regulatory Agency
(PPPRA), Debt Management Office (DMO), and
Central Bank of Nigeria (CBN) to verify their claims
suddenly backed out.

According to her, she could not sign off monies that
she would find difficult to explain to Nigerians later,
urging the populace to rise up and challenge the
marketers.
While applauding some marketers that have
demonstrated patriotic disposition to this current
crisis, the minister noted that many marketers had
resorted to black market operations and had kept on
fleecing Nigerians and smiling to the bank.
The minister, who said she had no regrets serving
Nigeria, noted that it was a privilege serving one’s
fatherland .

According to her, in spite of personal attacks on her
from some quarters, she has no regrets as her
service to the country has been guided by utmost
patriotism and altruism.
She noted that the records of service were there for
all to see, adding that a 50 per cent fall in oil revenue
did not amount to mismanagement of the economy
as this was not caused by the government.
The Jonathan administration, she said, was leaving
“positive economic legacies behind which nobody
can wish away because history cannot be rewritten”.

Such legacies, she said, include 1.4 million jobs
created yearly out of 1.8 million jobs required as
confirmed by the National Bureau of Statistics; the
Development Bank of Nigeria which she added, will
make affordable loans of up to 10 years available to
Nigerian businesses. The list, according to her
include the Nigerian Mortgage Refinance Company
which is spearheading a range of reforms which will
vastly increase the number of mortgages in the
country and 3600 Nigerians that were given multi
million naira grants to finance their business and the
22000 direct jobs created and over 80,000 indirect
jobs thru YOUWIN, among others.
Meanwhile, a former Minister of Defence, General
Theophilous Danjuma has tasked the President-elect
General Muhammadu Buhari to probe President
Goodluck Jonathan and his administration's alleged
gross mismanagement of resources which he said
has left the nation indebted to the tune of over $60
billion.

Danjuma, who spoke in Takum, Taraba State during
the official commissioning of two set of bridges he
constructed along Takum-Katsina highway yesterday,
said it has become imperative for the incoming
administration to probe the outgoing administration
if the menace of corruption would be curbed in the
country.

Danjuma said, "It is disheartening to know that the
incoming government of Buhari will have to contend
with a debt of over $60 billion and there is nothing to
show for this huge debt. Well, we would know what
happened to these monies because I believe that the
Buhari administration has to, and should, in national
interest, investigate the administration so that we
would know what happened".
Giving reasons why he chose to not to participate in
politics, Danjuma stated that he chose to steer clear
of politics because for him, "all the political parties
are the same, very bad and so I rather steer clear of
it. I support anyone who comes to me for money
based on what I make of their person irrespective of
political affiliations."

Meanwhile, ahead of Friday’s transition to a new
government, economic analysts have stated that one
of the major issues President-elect Buhari and his
team will grapple with is the mixed corporate
earnings performance of quoted companies and the
conflicting macroeconomic signals which leave
investors at sea regarding market direction and
appropriate investment decisions.
After the breath-taking rally in the Nigerian financial
market post-2015 Presidential polls, markets recently
bucked the trend, defying analysts' expectation of a
strong rebound post elections.
Data collated by the financial and investment
advisory firm, Afrinvest, at the weekend showed that
the NSE All Share index, from a YTD high of 3.1 per
cent (35,728.12) post presidential election closed the
week on a YTD return of -0.8 per cet (34,388.12).

The Afrinvest’s report noted that trading activities in
the fixed income space has followed a similar
pattern, bucking a strong rally post-elections -
following renewed foreign investor appetite - to a
sideways trading pattern over the past weeks.
It said the development in the markets reflects the
mixed corporate earnings performance of quoted
companies and the conflicting macroeconomic
signals which leave investors at sea regarding market
direction and appropriate investment decisions.
Headwind factors of rising consumer prices, fiscal
austerity and consequent weaker consumer spending
powers, as well as uncertain fiscal direction of
political transition have veiled the improving
dynamics in the polity and commodity prices.
In its weekly report, a copy of which was made
available to our correspondent at the weekend,
Afrinvest reports that the global monetary landscape
remains broadly accommodating while the domestic
monetary landscape has also recorded some gains
with the naira remaining stable while external
reserves haemorrhage is being gradually contained.”
Analysts from the company expressed the confidence
that economy would bounce back once the incoming
administration makes the direction of its economic
policy known as Nigerian and foreign investors are
currently adopting a wait-and-see attitude.
The report said, “We imagine that the modulation the
markets await is a successful transition to a new
government come May 29th and more importantly, a
stable fiscal environment which is consequent on the
policy pronouncements of the incoming government.

Whilst the risk factors (headwinds) are evident,
recent positive signals (tailwinds) as noted above
posit a short to medium term attractive valuations
for securities.”