Coordinating Minister for the Economy (CME) and Minister of Finance, Dr. Ngozi Okonjo-Iweala, has put the nation’s total debt stock at $63.7 billion, which encompasses multilateral as well as domestic loans by successive federal and state governments since 1960.
The minister said that of this figure, $21.8 billion was incurred under the outgoing government of President Goodluck Jonathan.
Her disclosure is coming on the heels of 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 which she said was accumulated over a long period of time by several administrations.
Giving insight into the $21.8 billion debts incurred under the Jonathan government, the minister said the debts were 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 explained that the leap in the debt profile between 2012 and 2015 was triggered off by the 53 percent wage increase implemented by the late Umaru Yar’Adua administration in a fell swoop.
This, she said, skyrocketed government’s borrowing from N524 billion to over N1 trillion in order to meet the salary increase, adding that the country’s domestic debt increased by $18.1 billion mainly because of the 53 percent increase in the pay of civil and public servants.
The minister stated that at the time of the salary increase, she was still with the World Bank, adding that she had written and warned on the consequences of acquiescing to such a huge increase.
Absolving the Jonathan administration of blame, the minister said the government had in deed taken a careful and meticulous approach to managing the nation’s debt, noting that the present administration, for the first time in the nation’s history, retired a domestic debt of N75 billion in 2013.
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 percent 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 percent 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.