Okonjo-Iweala: Nigeria’s debt has increased from N19.3 trillion in 2015 to N91.6 trillion in 2023

Okonjo-Iweala: Nigeria's debt has increased from N19.3 trillion in 2015 to N91.6 trillion in 2023

The Director-General of the World Trade Organisation, Dr. Ngozi Okonjo-Iweala, has advised state governors in Nigeria against excessive borrowing.  Continue Reading>>>

Okonjo-Iweala said this on Monday in Abuja at the Nigeria Governors’ Forum 2023 induction for newly-elected governors.

The Forum had the theme: “Governing for Impact (Building Sub-national Governance).”

The former Minister of Finance in Nigeria tasked the governors to improve on the Internally Generated Revenue of their states as well ensure transparency in the management of state resources.  Continue Reading>>>

OKonjo-Iweala said: “Nigeria’s gross debt level has climbed from N19.3 trillion in 2015 to N91.6 trillion in 2023.

“The debt-to-GDP ratio has almost doubled from 20 per cent to 39 per cent over that time period.

“While the debt-to-GDP ratio may not look so alarming, as revenues decline, the burden of debt servicing has increased dramatically.

“The debt service to revenue ratio is certainly alarming, at 83.2 per cent in 2021 and 96.3 per cent in 2022, according to the World Bank.

“This means that at the federal level, after servicing our debt, there is little room to pay for recurrent expenditures, let alone investment.”

Okonjo-Iweala said that dealing with the fiscal deficit would be more difficult with an oil subsidy bill of N3.36 trillion for the first half of 2023 (or N6.72 trillion if it is not removed).

She added that the deficit was made worse by revenue losses from oil theft.

“On the revenue side, states have a substantial responsibility. Too few states are raising internally generated revenue of any significance,” she said.

She said that data from the National Bureau of Statistics and State Audited Financial Statements by the civic-tech group, BudgIT, indicated that 33 states relied on federal transfers for the majority of their revenues.

She said: “For 13 of these states, monthly Federation Accounts Allocation Committee allocations accounted for over 70 per cent of revenue.

“Aggregated IGR from the 36 states did rise from N1.2 trillion in 2020 to N1.61 trillion in 2021, but this pales in comparison to FAAC allocations to states of N2.23 trillion in 2020, N2.42 trillion in 2021 (and N3.16 trillion in 2022).

“While I commend those states that have made additional efforts, Governors need to do much more.

“States must figure out ways to increase IGR.

“This goes hand in hand with using your 48 per cent share of federal allocations more transparently, efficiently and effectively.

“You must share with your state citizens how much FAAC allocation you receive each month, how much IGR you collect, and how you spend it.

“We used to publish this information routinely during my time as finance minister under Presidents (Olusegun) Obasanjo and (Goodluck) Jonathan.

“We must resume this practice so your citizens can hold you accountable.

“Please watch your debt profiles, and keep careful control of expenditures, even as you invest in infrastructure, education, and basic health systems.

“Please endeavour to pay teachers, health workers and others their salaries, and retirees their pensions.”

On her part, the Deputy Secretary General of United Nations, Hajiya Amina Mohammed, urged the governors to deliver better governance to regain the trust of the people for a more cohesive nation.

Mohammed said that the failure of government had reduce the people’s confidence, hence the way to regain it was to offer better services, better opportunities, better safety, better governance, and a healthier environment.

She said: “When we fail to deliver for people on their rights and their futures, we erode their faith in power, in politics, in the state.

“That results in a loss of trust, in resentment between generations and towards elites, and in greater tensions between groups, cultures, ethnicities and religions.”

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