Nigeria’s total debt now N91.6 trn –Okonjo-Iweala

COMFORT EKELEME with agency report

Nigeria’s total debt increased from N19.3 trillion in 2015 to N91.6 trillion in 2023 while the debt-to-GDP (Gross Domestic Product) ratio has almost doubled from 20% to 39% during the period.
The Director General (DG) of the World Trade Organization (WTO), Dr. Mrs. Ngozi Okonjo-Iweala disclosed this on Monday
while addressing the 2023 Induction of the Governors -elect and Re-elected ones on Nation Building with the Theme: “Governing For Impact” (Building Sub-National Government) at the State House Abuja.

She said though the debt-to-GDP ratio may not look so worrisome but as revenues decline, the burden of debt servicing has increased dramatically.
According to her, the debt service to revenue ratio is certainly alarming, at 83.2% in 2021 and 96.3% in 2022, according to the World Bank, stressing that this means at the federal level, after servicing our debt there is little room to pay for recurrent expenditures, let alone investment.

She said, “Dealing with the fiscal deficit will of course be infinitely 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). The deficit is made worse by revenue losses from oil theft.
“The difficulties around this issue underscore the importance of political consensus – whether you are in government or in the opposition – on policies critical for nation-building”.
On the World Trade, she urged the new governors to aim to double Nigeria’s share of World Trade from 0.33% to 0.66% within a decade.
Nigeria and Africa she noted, more generally, have some of the world’s highest trade costs, adding that WTO economists estimate that Nigerian exports to other countries in Africa face trade costs equivalent to a 460% tariff, while exports to the rest world face the equivalent of a 210% tariff.

The WTO boss lamented worrying signs of regional divergence, with Africa’s export volumes projected to shrink by 1.4% this year, compared to 3.3% growth for North America.
She said that for Nigeria, the IMF projects 3.2% GDP growth this year and 3.0% next year – slightly better than global growth but underperforming the projected growth rates for sub-Saharan Africa as a whole, which are at 3.6% and 4.2% respectively.

She stated that the current GDP growth rates are higher than the very low 1.2% average annual growth rate registered between 2015 and 2019, the five years before the pandemic, but well below the 6.4% average for the preceding five-year period, from 2010 to 2014″.
In most developing countries, and across much of Africa, per capita incomes remain well below pre-pandemic trends she noted.

The DG asked the governors to watch their debt profiles, and keep careful control of expenditures, even as they invest in infrastructure, education, and basic health systems
She also encouraged the them to exhibit transparency and make judicious use of the resources of the state, saying that if they govern well, open, transparent and manage their state well, they would attract private investment and multilateral support.

She observed that the FAAC allocation received by some states is bigger than the budgets of several African countries, urging that if those countries can grow at 4 or 5 or 6%, “your states can do better.

“You must share with your state citizens how much FAAC allocation you receive each month, how much Internally Generated Revenue, 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.

“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”, she stressed.

On export, she said Nigeria’s exports of digitally-delivered services are growing fast – growing by 23% on average per year since 2005, compared to 8% for the continent as a whole.
She said Nigeria’s exports of such services were worth $1.2 billion in 2022 – only seventh in Africa, accounting for 3.7% of the continent’s exports of digitally-delivered services.
“So we have plenty of room to grow.
By riding these two transformations – demographic and digital – and taking full advantage of the multilateral trading system and regional economic integration, Nigeria can become a platform for producing goods and services to meet demand at home, across Africa, and in the rest of the world.
“Doing so would be transformative in terms of job creation as well as productivity growth. Success is only possible if we get the skills base right – and if we build the hard and soft infrastructure needed to seize the new opportunities.
“I remain convinced that a better future is within our collective grasp. But to move ahead and seize it we will need political and business leaders at the state and national levels to form a compact in pursuit of pro-growth and pro-development policies.
“Nation building is impossible in the absence of trust – perhaps especially so in Nigeria. Even before independence, the generation of leaders that led us to freedom identified how important trust would be to our nation’s success”, she noted.
Speaking on migration, Okonjo-Iweala said that over 15,000 Nigerians emigrated to Canada in 2021, joining 19,000 who had moved there in the previous two years while estimates for 2022 are 20,000, and over 50,000 skilled Nigerians in the space of 4 years.
“In the first half of 2022 alone, the UK granted skilled worker visas to nearly 16,000 Nigerians.
“With our large numbers of educated people fluent in English – together with a deep network of connections to the diaspora – we are well positioned to seize these opportunities. But such businesses, like our tech startups, will struggle to thrive if we keep losing so many of our most skilled young people to emigration.
“Thousands of Nigerian-trained medical doctors work in the USA. The most popular phrase in Nigeria now is “I am going to japa.” I am not telling people not to go, but what I am saying is how many of these japas can we afford? If you japa we want you to “kaka” she stated.

On digitalization, she said digitally-delivered services trade is driving growth and global trade, adding that between 2005 and 2022, global trade in these services – everything from streaming games to consulting services to finance, insurance and tourism services provided by internet – grew by an annual average of 8.1%, compared to 5.6% for goods.
“The total value of digitaly-delivered services exports rose to $3.8 trillion in 2022. In 2012, services delivered over computer networks accounted for about 8% of total global trade in goods and services. A decade later, that share had risen to 12%.
Earlier in his welcome speech, the Chairman of the Governors Forum (NGF) and Governor of Sokoto State, Aminu Tambuwal told the incoming Governors-elect, re-elected governors and outgoing Governors that full diversification of the Nigerian economy entails shifting away from reliance on export of commodity like oil, gold, and agricultural produce to industrialisation for genuine development and sustainable growth of the economy.
He said that re-articulation of the national industrialisation policy, improved power supply and human capital development are critical in the quest for industrialisation for poverty alleviation and employment generation.
“Ladies, and gentlemen, as some of us are exiting as helmsmen of our respective states, the new and incoming governors are reminded of the task ahead. We have made giant strides in our various states within limited resources at our disposal in the areas of infrastructural development and provision of social services.
“We faced the most difficult times in economic management of our states during the COVID 19 pandemic. We exited recessions and the economy is now on the pathway for sustainable growth. You now face the important task of putting viable strategies in
“Unemployment, poverty, and insecurity are difficult tasks incoming administration are expected to face in their respective states. Building strong and viable institutions in the polity will help in tackling unemployment, reducing poverty, and ensuring the provision of security of lives and property. This is a worthy legacy to be bequeathed to our children and generations to come” he said.
In his address on Task of Nation Building, the Chairman of UBA Plc, Mr. Tony Elemelu urged the Governors- elect to prioritise youth engagement, stressing that it is the sure means to create the most impact and catalyse socio-economic development and growth – for their respective states and Nigeria at large.
He said entrepreneurship is a transformative process as it helps explore creativity, pursue passions, and allows to contribute meaningful impact and helps to build resilience and
perseverance.
He urged political leaders to create more private sector friendly policies to increase wealth creation and encourage entrepreneurship.
“As leaders, policymakers, and stakeholders in our society, we must recognize the potential of entrepreneurship to promote youth engagement and wealth creation in Nigeria.
“We must invest in programmes that support and encourage young people to pursue their dreams and develop the skills they need to succeed as entrepreneurs. Let us work together to create an enabling environment for entrepreneurship to thrive in Nigeria, and to empower our youth to become active participants in the development of our country”, he added.

.As inflation rate rises to 22.22% in April

Meanwhile, Nigeria’s headline inflation rate rose to 22.22% in April 2023, a 0.18% point higher than the 22.04% recorded in the previous month.
According to the latest Consumer Price Index (CPI) report by the National Bureau of Statistics (NBS), Nigeria’s inflation rate has increased for the fourth consecutive month, maintaining the highest rate in 17 years. Compared to the corresponding period of 2022, inflation increased by 5.4% from 16.82% recorded in April 2022.
On a month-on-month basis, the All-Items Index in April 2023 was 1.91%, which was 0.05% points higher than the rate recorded in March 2023 (1.86%). This means that in April 2023, on average, the general price level was 0.05% higher relative to March 2023.
The food inflation rate in April 2023 was 24.61% on a year-on-year basis, which was 6.24% points higher compared to the rate recorded in April 2022 (18.37%) and 24.35% recorded in March.
The rise in food inflation on a year-on-year basis was caused by increases in prices of oil and fat, bread and cereals, fish, potatoes, yam and other tubers, fruits, meat, vegetable, and spirits.
The “All items less farm produce” or Core inflation, which excludes the prices of volatile agricultural produce stood at 20.14% in April 2023 on a year-on-year basis, up by 5.96% when compared to the 14.18% recorded in April 2022. It is also higher than the 19.86% recorded in March 2023.
The highest increases were recorded in prices of gas, air transport, liquid fuel, vehicle spare parts, fuels, and lubricants for personal transport equipment, medical services, and road transport.
The contributions of items on the divisional level to the increase in the headline index are; food and non-alcoholic beverages (11.51%), housing water, electricity, gas and other fuel (3.72%), clothing and footwear (1.7%), and transport (1.45%).

Nzekwe urges FG to provide enabling environment for businesses

Similarly, former President, Association of National Accountants of Nigeria (ANAN), Dr. Samuel Nzekwe has taken a look at the present economic situation of the country saying that the 22.22 per cent inflation rate released by the National Bureau of Statistics (NBS) is expected.
Dr. Nzekwe, who spoke with Daily Champion in a telephone interview Monday noted that the hike in the nation’s inflation rate is expected because nothing has changed.
Dr. Nzekwe however, maintained that there is no critical development from the part of the government, saying that what we see is that there is no enabling environment for productive sector to thrive.
Continuing, he said, “that there is no way we can have inflation coming down without a conducive environment for the productive sector to thrive”.
He also noted that the country is importing inflation because most of the goods and services consumed in Nigeria are being imported.
“The way out is for the country to start meaningful production, but as far as we are importing everything we consume in this country, we will be at the mercy of external volatility,” he said.
On a month-on-month basis, NBS report shows that the All-Items Index in April 2023 was 1.91per cent, which was 0.05per cent points higher than the rate recorded in March 2023 (1.86per cent). This means that in April 2023, on average, the general price level was 0.05per cent higher relative to March 2023.
The food inflation rate in April 2023 was 24.61per cent on a year-on-year basis, which was 6.24% points higher compared to the rate recorded in April 2022 (18.37per cent) and 24.35per cent recorded in the previous month.