Nigeria’s Debt Profile to Hit N38.68trn by December 2021, Says Finance Minister

Minister of Finance, Mrs. Zainab Ahmed

*Canvasses phased completion of road projects

By Deji Elumoye in Abuja

The federal government on Tuesday painted a bleak future of the nation’s debt profile saying it was bound to increase by N18.67 trillion between June, 2020 and December, 2021.

Minister of Finance, Budget and National Planning, Zainab Ahmed, who gave this indication while defending the ministry’s 2021 budget estimate before the Senate committee on Local and Foreign Debt stated that Nigeria’s debt stock, both external and domestic would rise to N32.51 trillion by December 31, 2020.

The Minister who disclosed that the debt stock of the Federal, state governments and the Federal Capital Territory stood at N31.01 trillion as at June 30, 2020 further revealed that the debt profile was expected to rise to N38.68 trillion by December 31, 2021.

She said: “The Total Public Debt Stock comprising the External and Domestic Debts of the Federal and State Governments and the Federal Capital Territory (FCT) which stood at N31.01 Trillion ($85.90Billion) as at June 30, 2020 is projected, based on existing approvals, to rise to N32.51 Trillion by December 31, 2020 and N38.68 Trillion by December 31, 2021.”

Speaking on abandoned projects, the Minister advised the Federal Ministry of Works to pick priority road projects across each of the geo-political zones and ensure their completion before embarking on fresh road projects.

According to her, “I’m one person that feels that we should just do this and take one major road in one geopolitical zone and finish.

“We were not able to do that because of the processes in which appropriation is made both at the executive as well as the legislative arms of government. But truly, if we were able to just take one or two projects at a time and complete it before going to the next one, it will be better.

“So what the contractor does is the bit that has been cut out for him to do in that particular area. Once the fund is released and it is finished, we stop again. That’s the consequence of these numerous projects that we put in the budget. It is not related to Sukuk-funded projects alone, it cuts across all the projects.

“You will see a road that costs, may be, N5 billion, and you will see a provision for N100m, N200m or N300m. Of course, the project will never finish. After two years, the contractor comes back and asks for variation, and the amount keeps growing.

“I wish that we get to a point when we sit down as government and agree that let us select a few projects, finish them in 2020, and then in 2021, we select the next. So that on a geopolitical basis, those selections are done as a collective process.”

Ahmed, however, assured that work on the legacy projects namely Lagos-Ibadan expressway, 2nd Niger Bridge, East-West road, and Abuja-Kaduna-Kano road, were ongoing without hitches due to availability of funds.

“The Nigeria Sovereign Infrastructure Agency (NSIA) was assigned the four major road projects to do. These projects are Lagos-Ibadan highway, 2nd Niger Bridge, East-West road, and Abuja-Kaduna-Kano road.

“The projects are going because there is funding on the ground and because they are few, they are concentrating on them and work is ongoing. I wish we get to a point when we narrow down project implementation to a few projects at a time.”

The Finance Minister attributed the delay in releasing Sukuk funds to contractors for executed projects, to the need to ensure thoroughness and verify claims before disbursements.

“There is an audit process, the first batch has been released, the second batch is being released as we speak. There are some checks that we have to put in place to make sure that the claim that is being made is actually valid. There are parties that have been engaged to do a second level of verification in addition to the claims the Ministry of Works sends as invoices due for payment. The batch which is about N58 billion has been released. There is another N35 billion that is under processing”, Ahmed said.

In his response, the Chairman of the Committee, Senator Clifford Ordia, however assured that the rising debt profile will seriously be monitored by the Senate and by extension the National Assembly with a view to saving the country from total debt trap.