The Federal Government’s total debts and contingent liabilities have hit N60.9 trillion even as the figure could balloon to near N65 trillion before the end of the year, as President Muhammadu Buhari-led administration scrambles for any available funds to survive the current financial squeeze before its expiration in May, next year.
The figure does not include undocumented contingent liabilities to university lecturers, public school teachers and other public employees to whom the government is indebted. It also excludes other pending financial liabilities to non-lending bilateral and multilateral institutions.
The Federal Government’s debt obligation stood at N35.7 trillion as of June. The amount does not include the Central Bank’s lingering overdrafts estimated at N20.6 trillion at the last count. Besides, the government’s “contingent liabilities” to different institutions and projects stood at N4.6 trillion at the close of last year. The figure is projected to reach N4.98 trillion at the end of the year and jump by as much as 50 per cent to N7.52 trillion next year when the current administration will leave office.
Items and organisations on the contingent liability list are Nigeria Mortgage Refinance Company Plc, Nigeria Ports Authority – Lekki Deep Seaport, pension arrears, NNPC – AKK Gas Pipeline Project among others.
Meanwhile, both the federal and state governments are piling on more local debts as international credit lines become increasingly inaccessible or unaffordable. Recent data point to a remarkable shift of preference for local debts.
Added to this new trend, states are slipping faster into indebtedness than the Federal Government, as suggested in a review of data by the Debt Management Office (DMO). Their total debt stocks expanded by 11.6 per cent in the first half of the year as against the combined growth of 8.3 per cent in the sovereign debts.
But while the average net debt incurred by state governments increased by over one-tenth in the six-month period, the growth of their exposure to external debtors fell by approximately four per cent in the period (N78.3 billion).
According to the DMO data released on Monday, the external debt profile of the sub-national governments plus the Federal Capital Territory (FCT) declined to N1.89 trillion as of June against N1.97 trillion owed by the entities at the close of last year.
But the shortfall in the debt portfolios held by foreign institutions and investors was substituted by a more aggressive increase in domestic borrowings, which increased by N0.82 trillion or 18.5 per cent during the same period.
Debts owed by the 36 states and FCT rose from N6.43 trillion to N7.17 trillion from January to June this year. In percentage terms, an average state increase is 11.6 per cent more indebted to both local and foreign debtors than it was six months ago.
THIS is as President Buhari, in separate letters of request, yesterday sought approval of the Senate for the issuance of promissory notes totalling over N402 billion. The first of such requests read during plenary by President of the Senate, Ahmad Lawan, was N375 billion meant for settling outstanding claims owed various exporters.
Other similar debt payment requests, to be routed through DMO, are N6.706 billion for the Kebbi State government for the construction of federal roads in the state and N2.706 billion for the Taraba State government for constructing federal roads.