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Nigeria’s Debt Is Becoming Worrisome — NEITI

The Nigeria Extractive Industries Transparency Initiative, NEITI, Sunday, expressed concern over Nigeria’s level of indebtedness, declaring that Nigeria’s debt in relation to revenues appears to have reached critical levels. Acting Executive Secretary of NEITI, Mr. Waziri Adio, NEITI, in its latest Quarterly Review, which focused on disbursement from the Federation Accounts and Allocation Committee, FAAC, disclosed that  a total of N513 billion was spent on debt servicing by the three tiers in the first quarter of 2017, compared to total disbursements of N1.276 trillion.

It said: “This means that debt servicing took up 40.27 per cent of FAAC disbursement for the first quarter of this year. The figure reveals that debt servicing as proportion of total FAAC allocations is generally higher in the first quarter of the year, after which it falls to lower levels. Based on this, the figure of 40.27 percent observed in the first quarter of 2017 might be an upper threshold and it would thus be expected that this figure will be lower for the remaining quarters of the year.”

However, the report noted that the Debt Management Office, DMO, is yet to provide data on the figure for the second quarter of 2017. It added that domestic debt servicing constituted 90 per cent   of total debt servicing, explaining that domestic debt servicing consistently outstripped external debt servicing. According to the NEITI report,   in the first quarter of 2015, domestic debt servicing made up over 93 per cent of total debt servicing, while the figure did not change much by the first quarter of 2017 as domestic debt servicing was over 92 per cent of total debt servicing. Also, the report stated that N760.18 billion was released by the Federal Government to the 36 states and the Federal Capital Territory, Abuja, paid in two tranches.

According to NEITI, the money represents refunds of over deductions from FAAC allocations to states and local governments used for quick payment of debt relief granted to Nigeria by the Paris Club between 1995 and 2002.

Photo Credit: 
venturesafrica.com

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