Nigeria Spent N1.1tn on Debt Service in Nine Months

0
  • Revenue dropped by over 60% in Q3 2016 FG to entrench monitoring, evaluation in MDAs

Tobi Soniyi in Abuja

Between January and September 2016, the federal government spent N1.094.22trillion on debt servicing. Government figures seen in Abuja tuesday revealedthat N1.044trillion was used for local debt servicing as against the N980.55billion budgeted in the 2016 spending plan, representing N63.45 billion increase.

N50.22billion was spent for external debt servicing indicating some N9.36 billion increase from the N40.86 budgeted.

Last year, the Debt Management Office (DMO) said government planned to spend 35 percent of its 3.86trillion forecast revenues on debt servicing, up from 26 percent in 2015.

The government had also planned to borrow as much as $5 billion to finance a record budget deficit of N3 trillion.
Federal government domestic debt stock as at September 30, 2016, stood at N10,845.22trillion, according to the DMD.

External debt stock which the DMO said was mostly low interest funds from multi lateral financial institutions stood at $11.583billion representing an increase of $320.70billion (or 2.85%) from external debt stock in the second quarter of 2016 and an increase of $965.24billion (or 9.09%) over the $10,618billion documented in the third quarter of 2015.

“The increase in the external debt stock in the third quarter of 2016 was due largely to the rise in Non-Paris Club Bilateral Debts drawdown,” Minister of State for Budget and National Planning, Zainab Ahmed, said, quoting DMO data.

Meanwhile, government revenues decline by over 60 percent on account of uncertainties in global oil prices worsened by crude oil theft, illegal bunkering and militancy in the oil rich Niger Delta region.

Presenting the 2016 Budget Implementation and Performance Monitoring report for the third quarter Ahmed said net oil receipt dropped by 66.6 percent to N2012.37billion in the third quarter of 2016 as against N603.53billon in same quarter last year.

However, non oil revenue improved by 9.47 percent to N777.37billion from N709.96billion same quarter last year.
The minister said in 2016 government largely borrowed from domestic sources to fund capital projects and must ensure it does not continue that way.

Nigeria faces its worst economic crisis in decades after a slump in oil prices, which make up 70 percent of government income and 90 percent of foreign exchange earnings, hit public finances and the naira currency.

Giving further breakdown on the implementation and performance of the 2016 budget in the third quarter, the minister said a net sum of N987.17 billion was available for distribution between the three tiers of government in the third quarter, with a 30 .96 percent shortfall of N442.73billion.

No transfers were made to the Excess Crude Account (ECA) in the first two quarters of the year following fall in global oil price and supply constraints, however N145.48billion was transferred to the account in the third quarter due to price recovery.

According to her, a total of N85. 17 billion was withdrawn from the ECA for distribution amongst the three tiers of government within the quarter leaving a balance of $2.89billion balance as at September 20.

The 2016 budget had a total appropriation of N6.06trillion with recurrent (Non Debt ) expenditure at N2.67trillion, debt serving at N1,5trillion, statutory transfers of N351.37 billion and capital expenditure of N1.587 trillion.
The government spent N586.24billion on its non debt recurrent expenditure in the third quarter, with a decrease of N75.36billion below its third quarter estimate of N661.60 billion.

A total of N87.84billion was released as statutory transfers in the third quarter of 2016. A breakdown of the actual transfers in the third quarter shows that N10.26billion was released to the Niger Delta Development Commission (NDDC); N17.50billion was released to the National Judicial Council (NJC); N19.28 billion was released to the Universal Basic Education (UBEC); N11.25billion was released to the Independent National Electoral Commission (INEC); N28.75billion was released to the National Assembly; N0.50 billion was real eased to the Public Complaint Commission and N0.30billion was released to the Human Rights Commission.

“It is worthy to note that quarterly releases under this subhead are made up of o demand by the beneficiaries subject to budgetary provisions and availability of funds” the minister said.

On Capital releases, Ahmed said as at October 19, 2016, a total of N753.663 billion out of the appropriated N1.587trillion was released for priority projects and programmes identified as contributing to the Strategic Implementation of the budget.

N318.35 billion was released and cash backed in the first quarter, N77.93 billion in the second quarter and 357.38 billion naira in the third quarter.

According to the minister, a review of the utilisation performance as at 19 October 2016 showed that out of the total capital budget appropriation of N1.587trillion, N753.663 billion (47.5%) has been released and cash backed with N403.4billion (54%) has so far been utilised by 30 out of 46 MDAs reported by the Office of the Accountant General of the Federation.

Meanwhile the federal government has pledged to entrench policies that will boost monitoring and evaluation framework in all ministries, departments and agencies of government for effective project delivery.

Minister of Budget and National Planning, Mr. Udoma Udo Udoma, made this disclosure yesterday while delivering a keynote address at a high level meeting on promoting effective policy monitoring and evaluation of MDAs in the implementation of the 2017 budget, at the Banquet Hall, Presidential Villa.

Udoma said “My ministry will give priority to strengthening of sectoral policies with robust monitoring and evaluation frameworks.”

He pointed out that the strategy would be achieved by working in close collaboration with the European Union (EU) SOFEGOR programme to provide technical support to ministries with “development of sectoral results-based monitoring and evaluation strategies to complement the policies”.

To ensure the efficiency of project delivery, Udoma stated further that the budget and national planning ministry will equally work with ministries that already have sectoral policies to enhance the implementation of the document.
Emphasising the importance of monitoring and evaluation in the life of any nation, the minister said “simply put, it means regular measurement and reporting keeps you focused-because you use that information to make decisions to improve your results”.

According to him, countries with strong performance measurement supported by good monitoring and evaluation governance systems “are better of delivering services to their citizens than those with weaker measurement systems. This therefore strengthens the imperative of M&E systems for government worldwide”.

“It is only when policies are right and executed rightly that development can happen. However, this cannot happen in isolation and without strong monitoring and evaluation framework, as this would ensure that policies are well planned, executed, and that corrective measures are taken as a result of feedback from monitoring visits, while lessons learned will be used to inform policy and improve the design of new programmes and projects,” Udoma said.