The World Bank has disclosed that Nigeria’s debt, which may be considered sustainable for now, is vulnerable and costly.
According to the Washington-based global financial institution, the country’s debt is also at risk of becoming unsustainable in the event of macro-fiscal shocks.
The bank said this in the November edition of its Nigeria Development Update.
It said, “Nigeria’s debt remains sustainable, albeit vulnerable and costly, especially due to large and growing financing from the Central Bank of Nigeria (CBN).
“While currently the debt stock of 27per cent of the Gross Domestic Product (GDP) is considered sustainable, any macro-fiscal shock can push debt to unsustainable levels.
“However, the debt to the GDP in Nigeria is rising quickly, and the total stock of debt in absolute value has almost doubled between 2016 and 2020, and without a policy change is expected to reach 40per cent of the GDP by 2025.”
The bank further expressed concerns over the nation’s cost of debt servicing, which according to it, disrupts public investments and critical service delivery spending.
“The cost of debt servicing is also a concern as it is potentially crowding out public investment and critical service delivery spending. Interest costs have been above two per cent of the GDP since 2018, reaching 2.4per cent of the GDP in 2019 and then falling to 2.2per cent of the GDP in 2020.
“Cost of debt is high as Federal Government also resorts to overdraft (Ways and Means financing) from the CBN to meet in-year cash shortfalls. At end of 2020, the stock of the CBN Ways and Means financing was estimated at N13.1trillion or 8.5per cent of the GDP,” it stated.
It, however, said that the Federal Government was making efforts to negotiate terms with the CBN in order to convert the stock of overdraft financing into a long-term debt instrument, which would lower the cost of debt for the government and enhance fiscal sustainability over the medium long term.
Economists have raised concerns over the rising debt profile of the Federal Government.
It would be recalled that the Federal Government has been planning to push its public debt stock to N50.22trillion by 2023, with domestic debt at N28.75trilion and external debt at N21.47trillion.
This was according to the projections in the National Development Plan 2021-2025.
The Debt Management Office had disclosed that Nigeria’s public debt was N38trillion as of the end of the third quarter of 2021, with the total debt stock rising by N2.540trillion in three months between July and September, 2021.
The NDP shows that the President Muhammadu Buhari-led Federal Government plans to accumulate about N12trillion debt in two years from 2021 to 2023.
However, based on the plan, the government targets a reduction in total public debt by 2025.
A tabular illustration in the document shows the government targets N39.59trillion debt stock for 2021, N46.63trillion for 2022, N50.22trillion for 2023, N50.53trillion for 2024, and N45.96trillion by 2025.
Analysts have agreed with the World Bank on the costly and vulnerable nature of Nigeria’s public debt.
The Fiscal Policy Partner and Africa Tax Leader of PwC, Mr Taiwo Oyedele, expressed his agreement with the World Bank’s assertion, highlighting the high cost of debt servicing.
He said, “I agree with the World Bank. Although the debt to GDP ratio is not too high, if you think about the debt service cost to revenue ratio, it is already over 70per cent. That’s when you know it’s costly.
“Nigeria borrows at double-digit, and even when we borrow in dollars, the rates are very high and then you devalue the naira and the cost of servicing the debt in naira goes up because it is dollar-dominated debt.
“Put all of that together, and you can easily say to yourself that even though our debt to GDP ratio is very low, our cost of borrowing is unsustainable because it is very high, and therefore, make it very costly.”
He advised the government to have an integrated debt-revenue-expenditure strategy, which would address expenditure efficiency, terms of borrowing, and revenue optimisation.
He also advised the government to reconsider its priorities regarding its national budget.
A former deputy governor of the Central Bank of Nigeria and former presidential candidate, Kingsley Moghalu, also criticised the increasing borrowing tendency of the government, urging the officials to re-consider other ways of generating revenue for the country.
“There are many ways through which we can improve Nigeria’s domestic revenue situation without selling the future of our country. As to the argument that Nigeria does not have a debt problem but a revenue problem, that is mere sophistry. If you’re spending 90kobo of every one naira you earn repaying debt, you are insolvent.
“You cannot say that we have a debt-to-GDP ratio that allows you to continue borrowing. No! That is an argument for sustainable economies. You cannot be comparing Nigeria with advanced economies. We are in an economy that is still very basic.
“If you are not earning enough revenue, why are you borrowing? You are just compounding your problem. Why don’t you focus on where to get the revenue from instead of lazily ignoring that problem and just trying to survive with borrowing?
“If an individual was living a life that way, it would be a calamity. That is why Nigeria is in a calamitous situation today economically,” he said.
According to Moghalu, it is also not reasonable to borrow for infrastructural development as the government can expand the public-private partnership options for such development.
He said, “You cannot be borrowing for infrastructure. They should go and expand the PPP options for infrastructure.
“You don’t have to impoverish this country by borrowing. This is not sensible economic management.
“How sustainable economically are those infrastructures they claim to be building? Are they yielding enough money to pay back the debt?”
Compromised People Accuse Judiciary Of Corruption, Wike Affirms
Rivers State Governor, Chief Nyesom Wike has said that those accusing the Judiciary in Nigeria of being corrupt, are not clean themselves.
He noted that while corruption in the Judiciary undermines the courts’ credibility, those who often are quick to throw tantrum at Judiciary, particularly legal practitioners, are culpable as well.
Wike made this assertion, last Monday night, during a state banquet organised at the Government House, Port Harcourt, in honour of Hon. Justice Mary Peter Odili, on her 70th birthday and retirement from the Supreme Court of Nigeria.
“For me, those who are abusing the Judiciary of corruption, their hands are not clean. Anybody who is abusing the Judiciary or judges, their hands are not clean. But that does not also mean that even you in the Judiciary should not keep your house in order. That is the truth.”
Ahead of the 2023 general election, the governor urged state High Courts to abide by the provisions of the new Electoral Act, which prohibits them from handling pre-election or electoral matters.
According to the governor, some state High Courts are already acting in contravention of the law.
“The truth is that the Electoral Act says anything about pre-election or electoral matters, is now to be decided by the Federal High Court.”
Wike declared he would remain eternally grateful to Hon. Justice Mary Odili, for creating the opportunity for him to meet her husband and former governor of Rivers State, Dr. Peter Odili, when he ventured into active partisan politics in 1998.
The Rivers State governor reiterated that there was no politician serving at the federal or state level since 1999 that would deny the fact that they did not pass through the tutelage of Peter Odili.
He said despite the generosity of Peter Odili and his family, some of those whom they had helped politically, have regrettably betrayed and humiliated them.
“I have never seen a man who has suffered humiliation; I have never seen a man who has suffered betrayal in life like Peter Odili.”
Wike further explained that Peter Odili’s insistence that someone from the Ikwerre extraction should succeed him as governor in 2007, earned him some enemies.
“Dr. Odili’s biggest problem in this state today, people must know the truth, is because he said Ikwerre man must become governor, that’s it. If any man tells you that Odili has committed any other sin, it’s a lie. It’s just because he said Ikwerre man must become governor.
“Unfortunately, we the Ikwerre people whom he said should be governor, are the ones that put him in the witness box. But I want to appeal to him, forgive, you are a Christian. Forgive all of us.”
Wike, who recalled how the Odili family suffered blackmail and humiliation because of him, vowed never to grieve or engage in acts that would bring them into disrepute.
He reaffirmed that Dr. Odili’s fatherly counsel has been one of the reasons why he has succeeded in the governance and transformation of Rivers State since 2015.
In his remarks on behalf of his family, former Rivers State Governor, Dr. Peter Odili, said all through his wife’s career as a judicial officer, he never for once attempted to influence her in any matter.
The former recalled two instances when a late traditional ruler in Port Harcourt and his extended family members from Ndoni had approached him to intervene in matters before his wife’s court, but he declined and offered to help them pay their legal fees.
“When I finished being governor and went to Abuja to spend time with her, and a lot of political cases as you know were rolling over each other. All my friends in Abuja know and they tell each other, the moment you have case either at the Court of Appeal when she was there or at the Supreme Court, the access you use to have to come as a personal friend ceases until the case is over.”
Odili thanked Wike and the people of Rivers State for honouring his wife after 44 years of meritorious service in the Judiciary.
The Chief Justice of Nigeria, Justice Ibrahim Tanko Muhammad, described Justice Odili, as an epitome of dignity, hard work, fairness and excellence.
Represented by Justice of the Supreme Court, Justice Kudirat Kekere-Ekun, he said Justice Odili remains an inspiration to the girl-child.
“My Lord has shown what is possible with diligence, hard work and integrity. Through you we see that the sky is the limit.”
Wike Slams NBA’s Lacklustre Approach To Social Change
Rivers State Governor, Chief Nyesom Wike, has urged the leadership of Nigerian Bar Association (NBA) to go beyond issuing of statements, to taking concrete actions against attacks on the nation’s Judiciary.
Wike gave the charge at the book presentation in honour of Justice Mary Odili as part of activities marking her retirement from the Supreme Court of Nigeria and her 70th Birthday celebration, which held at Dr. Obi Wali International Conference Centre in Port Harcourt, last Monday.
Governors present at the event were: Dr. Okezie Ikpeazu (Abia); Rt. Hon. Ahmadu Fintiri (Adamawa); Mr. Udom Emmanuel (Akwa Ibom); Senator Douye Diri (Bayelsa); Samuel Ortom (Benue); Ifeanyi Ugwuanyi (Enugu); and Engr Seyi Makinde (Oyo).
The governor expressed regrets at the NBA’s lacklustre approach to social change, which is more of a disservice to the nation and exposes it to contempt.
“What is even worrisome on the part of the president of the NBA is his failure to admit that the NBA, including the inner and outer Bar, which he leads, have failed in their responsibility to protect the rule of law and defend the judiciary from punitive intimidation and erosion of its independence by the All Progressives Congress-led Federal Government.
“It is quite unfortunate that the NBA is only good at issuing bland statements of condemnation without more, while the judiciary continues to suffer ferocious bouts of harassment from a Federal Government that has become notorious for its contemptuous attitude towards the rule of law and the rights of Nigerians to an effective justice system.”
Wike also expressed his disagreement with some speakers in last Thursday’s valedictory court session organised in honour of Justice Odili, who laid the blame on politicians over the problems that the judiciary suffers.
Specifically, Wike said Chief Wole Olanipekun, SAN, speaking for the Body of Senior Advocates at the valedictory court session, identified corruption as the bane of the Nigerian Judiciary and pointed fingers of responsibility at politicians, lawyers and the Federal Government.
Wike noted that while the learned Senior Advocate was largely correct with respect to the issues of forum shopping by lawyers and the intimidation of the courts by the Federal Government, he was, however, wrong in his allusion to political cases as responsible for the debasement of Nigerian courts.
“Now, if I may ask: are lawyers not behind the contemptuous criticisms of judges by clients? How many lawyers have withdrawn from political cases in protest against unwarranted castigation of the court by clients?
“How many lawyers have withdrawn their services to clients on account of frivolous petitions against the court without their consent? Who are those who advice politicians to reach out to judges? Where are the lawyers that have ever advised their clients against reaching out to judges handling their matters?
“For me, let us stop the scapegoating and tell ourselves the truth that as lawyers, most of us are all involved in this despicable conduct, perpetrating the same evil, only at different levels because of our predisposition for success through backdoors without any regard to the damage we are doing to the reputation of the entire judicial system.”
The governor said the Federal Government had in 2016 unleashed premeditated midnight raids on judges’ homes, including the Justices of the Supreme Court, in Abuja, Port Harcourt, Gombe, Kano, Enugu and Sokoto states.
“In 2020, when the sanctity of Justice Mary Odili’s home was violated by hired members of the APC over the Supreme Court’s judgement that sacked the party’s governorship candidate for Bayelsa State, the NBA just condemned it, without any further follow-up action to forestall a reoccurrence.”
Wike also pointed out that there was need not also lose sight of the fact that the Judiciary is also a problem to itself because it is weak and incapable of asserting and safeguarding its independence from the predatory tendencies of other arms of government.
He noted that when judges are lacking in courage and integrity, they easily give up to improper pressure, influence and control, and the entire Judiciary suffers.
Wike assured that if elected the President of Nigeria in 2023, he will work with the National Assembly to prioritize the welfare of all judicial officers, including the provision of official cars and life-long accommodation as we have done here in Rivers State.
“With me on the saddle as the President and Commander-in-Chief, the Judiciary in Nigeria shall be in safe good hands and Nigerians will again experience the glorious days of an independent, vibrant and progressive Judiciary.”
In her remarks, former Justice of the Supreme Court of Nigeria, Justice Mary Odili, noted that though Nigerian judges are among the best in the world, they have never been treated right.
“A lot has been said about judges, judgements and corruption and what have you. The truths be told, the Nigerian judges have not been treated right, and the truth has not been said of Nigerian judges who in my view are the very best in the world. I’ve not delivered any judgement and have gone to sleep easily.”
Justice Odili, who was the first lady of Rivers State between 1999 to 2007, expressed delight that some of her judgements have been published for the public to assess.
“I am very happy that some of my judgements have been captured in print. And as I peeped through the judgements of those big judges and magistrates of the old Bendel State, my own judgements are now in the open for everyone to look at. All anyone can say is that she didn’t apply the law properly here; she did not understand the law properly. But, no one can ever say she gave judgement because of an interest in the matter.”
Benue State Governor, Samuel Ortom, who spoke on behalf of his colleagues, described Justice Odili as an epitome of humility.
Chairman of the occasion and former president of the Nigerian Bar Association, Onueze C.J.Okocha, SAN, noted that Justice Odili served the country meritoriously, honourably and without blemish to her character.
The five books written in honour of Justice Mary Odili are: Judicial Journey of Hon. Justice Mary U. Peter Odili; Essays in honour of Hon. Justice Mary Ukaego Peter Odili; Icon and On: Leading judgements on women’s rights in Nigeria in honour of Justice Mary Peter Odili; Mary Odili and the Law: Legal essays and Understanding the administration of criminal justice in Nigeria through the eyes of Hon. Justice Mary Ukaego Peter Odili.
Inflation Hits 16.82%, Exceeds IMF’s 2022 Projection
The Consumer Price Index rose to 16.82per cent in April from 15.92per cent in March, latest figures from the National Bureau of Statistics (NBS) have revealed.
The NBS disclosed this in its ‘Consumer Price Index April 2022’ report, last Monday.
The report read in part, “In April 2022, the consumer price index, which measures inflation increased to 16.82per cent on a year-on-year basis.”
The International Monetary Fund had recently projected that Nigeria’s Consumer Price Index would hit 16.1per cent in 2022.
This projection was presented in a tabular illustration in the IMF’s ‘Regional Economic Outlook for Sub-Saharan Africa’, which was published on its website.
The latest inflation rate in April is the highest in the country since August, 2021 when it was 17.01per cent.
The rise in the inflation rate in April shows that Nigeria is not left out in the global inflation surge.
But it is also an indication that citizens are becoming poorer, especially given the weakening state of the currency.
In the World Economic Outlook report, the IMF warned about the effects of inflation.
The report read in part, “In sub-Saharan Africa, food prices are also the most important channel of transmission, although in slightly different ways. Wheat is a less important part of the diet, but food, in general, is a larger share of consumption.
“Higher food prices will hurt consumers’ purchasing power, particularly among low-income households, and weigh on domestic demand. Social and political turmoil, most notably in West Africa, also weighs on the outlook.”
Recently, the World Bank said COVID-19 pandemic-induced inflation pushed about 23million Nigerians into a food crisis in 2021, especially in regions battling conflicts.
It added that the war-driven disruptions in the food trade, higher food price inflation, and higher costs of administering food assistance efforts are likely to make more people food insecure.
Aside from the pandemic and the ongoing war in Ukraine, the World Bank in a different report had said that import restrictions and non-flexible exchange rate management of the Central Bank of Nigeria were the major driving forces for food inflation in Nigeria.
The report had read in part, “Rising food prices are the underlying factor behind the surge of headline inflation in Nigeria. Food prices have increased due to import restrictions and a nonflexible exchange rate management.
“The current regime is keeping the official exchange rate of the naira artificially strong while the naira has weakened significantly on the parallel market. Additionally, the central bank has restricted importers’ access to foreign currency for 45 products and has reduced the supply to other importers.”
This, coupled with border closures across Nigeria in recent times, also worsened inflation, analysts said.
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