House to Investigate Nigeria’s Rising Debt Profile

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*Approves 90.23bn Bond for Taraba, Delta

By Shola Oyeyipo in Abuja

The House of Representatives has mandated its committees on Aids, Loans and Debt Management, Capital Market and Institutions and Banking and Currency to carry out investigation into Nigeria’s alarming debt profile.

This was sequel to the adoption of a motion by Hon. Yusuf Tajudeen (Kogi, PDP), who noted with concern that the alarming rise of Nigeria’s debt profile had led to growing economic instability, stifled growth and stunted development, as well as impacting negatively on various sectors of the economy.

According to Hon. Tajudeen, “The aim of the motion is to bring to fore the very alarming Nigeria debt profile,” noting that there is need to always tag borrowing to specific projects.

“N13trn in three years is humongous. If we have borrowed 13trn in three years, we must be sure we are delivering on the doable,” Tajudeen said.

The lawmaker noted that there had been continued controversies about the true state of the nation’s debt profile, such that there is glaring disparity in the figures given by the federal government and some fiscal policy monitoring organisations.

He said: “While the Vice President, Prof. Yemi Osibanjo, who is the Chairman of Nigerian Economic Council stated that the nation’s debt profile stood at $10billion in the last three years, the figures given by economic and budget experts as well as economic policy monitoring bodies range between $13billion and $47billion, from May 2015 to June 2018.

“Further analysis of Nigeria’s external and domestic debt reveals that the external debt grew to $17.83billion in June 2018 from $10.49billion in 2015, while domestic debt which was N8.39trilli0n in June 2015 has risen to N12.15 trillion as at June 2018; (representing an increase of N7.6 trillion in 3 years).”

The Kogi State lawmaker also raised concern that aside the rising national debt profile, there had been sharp increase in sub-national borrowing in the last three years, such that the domestic debts of states governments rose from N1.69trillion in June 2015 to N3.4trillion in June 2018.

Agreeing that while external and domestic borrowing is a necessary strategy to reflate the economy and stimulate national growth and development, he lamented that the positive impact of Nigeria’s borrowings since June 2015 was yet to be seen.

“Unlike global practices where borrowings are tied to specific projects mutually agreed by respective organs of government, various borrowings by the federal government since June 2015, have not been transparent, a situation which gives room for doubts, misconception and prone to manipulations.

“Nigeria’s revenues are sharply declining, which makes it increasingly difficult to attract and sustain higher debts, ultimately portending micro and macro dangers to the national economy amidst numerous developmental challenges,” he said.

It was against this argument that the House mandated the committees to look into the matter and report back within four (4) weeks for further legislative action.

However, in considering an interim report of the House Committee on Aids, Loans and Debt Management on the request for establishment of a promissory note and bond issuance to settle inherited local debt and contraband obligations, the House approved N90, 236, 461, 031, 69 as payment of refunds to two state governments for payment for projects executed on federal highways on behalf of the federal government.

From the amount, Taraba State gets N22, 254, 062, 330, 08 while Delta State gets N67, 982, 398, 701, 28 and the beneficiary contractors are; Setraco (N37, 432, 400, 000), Bouygues Nigeria Limited (N4, 636, 815, 486, 20), Simidia S & I International Limited (N346, 191, 766, 49), Hamdala Homes and Agency Limited (N210, 600, 000) and Lejmej Limited (960, 000, 000).