The Chairman, Advisory Board, Centre for Economic Policy Analysis and Research (CEPAR), University of Lagos, Akoka, Prof Ndubuisi Ifeanyi Nwokoma, has said that Nigeria’s fiscal situation is still very bad, given the country’s high debt profile and its economic situation.
In an interview with New Telegraph over the weekend, Nwokoma insisted that the cost of governance was still very high and called for its reduction as a measure to address the economic and financial challenge of the current administration of President Bola Tinubu.
This is as expectations are high of the release of public debt data for third quarter (Q3) 2024 by the Debt Management Office (DMO). As of the end of June 2024, Nigeria’s public debt stock was N134.3 trillion ($91.3 billion, according to data from the Debt Management Office.
But Nigeria’s total debt profile was N121. 67 trillion, (equivalent in dollars is $91.46 billion) in the first quarter of 2024. But during the first year of former President Muhammadu Buhari’s administration, Nigeria’s debt stock increased from $63.05 billion in Q1’15 to $71.6 billion in Q1’16.
Nigeria’s debt is made up of both domestic and foreign com – ponents. Foreign debt includes bilateral debts with countries like China, France, Germany, and Japan, and multilateral debts with institutions like the World Bank, International Monetary Fund (IMF), Islamic Development Bank (IsDB), and the African Development bank (AfDB) Domestic debt: Includes Federal Government of Nigeria securities, treasury bills, and Central Bank of Nigeria’s (CBN) Ways and Means. Nwokoma also said while the country’s debt profile is high, the leaders still wanted to borrow more.
He recalled that the Minister of Finance, Wale Edun, had recently announced that Nigeria planned to issue eurobonds and Islamic sukuk bonds as part of the debt portion for funding this year’s budget. According to the minister, the debt will comprise a $1.7 billion eurobond and $500 million of sukuk.
Nwokoma also recalled that the presidential spokesman, Bayo Onanuga, after the conclusion of the joint Arab-Islamic summit, had said that the Federal Government had urged Saudi Arabia to concretise the proposed $5 billion investment in Nigeria.
Onanuga said the assurance came when the Crown Prince and Tinubu met in Riyadh on the sidelines of the joint ArabIslamic Summit and that Saudi Crown Prince and Prime Minister, Mohammed bin Salman bin Abdulaziz Al Saud, had pledged to support Nigeria’s ongoing economic reform programmes.
“Nigeria wants an agreement with the Saudi government over a proposed $5 billion bilateral trade facility between the two countries,” Onanuga said.
Nwokoma further said that the structure of governance was still very unacceptable and that the prioritisation of projects is very flawed. He said: “The situation in Nigeria is very bad. There is a general consensus that Nigeria’s fiscal situation is very bad.
There is nothing any institution will report now that will be surprising. We already know that Nigeria is a big mess. It is in a big hole. The debt situation is no longer surprising but that the figures that are churned out, there is nothing that is new.
The fiscal situation of Nigeria has been bad. “The problem is that our leaders are not living the life that will reflect the dire situation. The cost of governance is still very high. The structure of governance is still very unacceptable.
The concept of nationhood is still very unacceptable. One begins to question the sustainability of even the union itself as a country because the way the country is being managed does not give hope that we will come out of the situation we are in as a country.
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