Coordinating Minister for the Economy (CME) and Minister of Finance, Dr. Ngozi Okonjo-Iweala, on Saturday put the nation’s total debt stock at $63.7 billion. This include multilateral as well as domestic loans by successive federal and state governments since 1960. According to her, $21.8 billion was incurred under the outgoing government of President Goodluck Jonathan.
This came in reaction to remarks by Vice President-elect Yemi Osinbajo that the outgoing administration of President Jonathan will be leaving a huge debt of $60 billion for the incoming administration of Muhammadu Buhari.
Speaking during an interactive session with finance correspondents in Abuja on Saturday, Okonjo-Iweala said it was wrong to blame the Jonathan administration for the huge debt stock of the country as it has accumulated over time.
She explained that the $21.8 billion debt incurred under the Jonathan government was made up of $18 billion domestic component and $3.7 billion external component.
According to her between 2007 and 2011, a debt of $17.3 billion was recorded while between 2012 and 2015, the debt incurred stood at $18.1 billion.
She further explained that the leap in the debt profile between 2012 and 2015 was caused by the 53 percent wage increase implemented by the late Umaru Yar’Adua administration, which increased government’s borrowing from N524 billion to over N1 trillion in order to meet the salary increase.
While Late Yar’adua was implementing the salary increase, the minister said she was still with the World Bank and remembered warning the government on the consequences of acquiescing to such a huge increase.
Commenting on the $63.7 billion debt stock, the minister said $9.7 billion or 15 percent is external while $54 billion or 85 percent represents domestic debt. She added that the states’ share of the $9.7 billion external debt is 33 per cent while the states’ share of the $54 billion is 20 percent.
Okonjo-Iweala pointed out that Nigeria still has one of the lowest fiscal deficits in the world with debt to GDP ratio of about 1.5 per cent of the budget, adding that the government has used the right tools to manage the economy and has only borrowed at very low concessionary rates to fund important infrastructure initiatives in agriculture, aviation, power, roads, health, and water resources, among others.
The minister added that where the country should watch carefully is the debt service to revenue, which is at 22 percent.
She argued that it was wrong to “to characterise the Jonathan administration as leaving $63 billion debt since the country’s debt stock was accumulated over a long time by several administrations.