Nigeria’s external debt stock rose by 148 percent in almost four years of the President Muhammadu Buhari administration, data from the Debt Management Office (DMO) showed.
The external debt soared to $25.61 billion as at March 31, 2019 from $10.32 billion as at June 30, 2015, according to the DMO, with Eurobonds worth $10.87 billion accounting for the largest chunk of the external debt, as it rose by 625 percent from $1.5 billion as at June 30, 2015.
The nation’s debt owed to the World Bank also rose to $8.90 billion from $6.19 billion in the period under review.
China, through its Export-Import Bank of China, is the third biggest lender to Nigeria with a loan of $2.55 billion as of March 31, 2019, up from $1.39 billion as of June 30, 2015.
Other lenders are African Development Bank ($1.25 billion), African Development Fund ($834.18 million), Arab Bank for Economic Development in Africa ($5.88 million), Export Development Fund ($59.15 million), Islamic Development Bank (15.51 million) and the International Fund for Agricultural Development ($176.19 million).
Bilateral debts from France (Agence Française de Dévelopement), Japan (Japan International Cooperation Agency), India Exim Banking of India and Germany (KfW) stood at $366.07 million, $74.63 million, $26.46 million and $171.79 million, respectively.
Last month, the agency primarily responsible for coordinating the nation’s debt management said that the Federal Government would borrow $2.7 billion from foreign sources this year, adding that it planned to first access cheaper funding from multilateral and bilateral lenders while any balance would be raised from commercial sources, which might include securities issuance such as Eurobonds in the international capital market.
Tag: Debt
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Nigeria’s Eurobonds debt rises to $10.9bn from $1.5bn in 2015
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Nigeria's N25.6trn debt profile alarming, unsustainable – Atiku
The presidential candidate of the Peoples Democratic Party (PDP) in the February 23 presidential election, Atiku Abubakar, has raised the alarm on over the nation’s N25.6trn debt, saying it’s unsustainable.
Atiku said the increasing debt profile of the country is becoming more than a source of concern, adding that the situation has got to a stage where all genuine lovers of Nigeria ought to raise an alarm.
Atiku, in a statement Wednesday by his media adviser, Paul Ibe, recalled that the nation’s debt profile as of May 29, 2015 when President Muhammadu Buhari took over, was ₦12 trillion.
“However, after four years of profligate spending, and even more irresponsible borrowing, our national debt doubled to ₦24.3 trillion by December, 2018.
“As alarming as this is, what is more troubling is that between December 2018 and March 2019, the administration of General Buhari added an additional and unprecedented ₦560 billion debt to our national debt profile.
“What could this junta have needed that amount for? If you take those dates into account, they fall on the period of electioneering, when monies were freely distributed by officials of this government in the name of Tradermoni and other election gimmicks that were discontinued after the election”, Atiku added.
The one time Vice President said it’s inconceivable that Nigeria could have had such unprecedented borrowings in the midst of almost unimaginable sorrowing.
This, he observed, has resulted in the country becoming the world headquarters for extreme poverty and the global capital of out of school children, noting further that Nigeria has slipped in the Corruption Perception Index of Transparency International.
Continuing, Atiku said, “As someone who headed the National Economic Council that paid off Nigeria’s entire debt under the visionary leadership of President Olusegun Obasanjo, Atiku Abubakar has the moral authority to call those who are turning Nigeria into a beggar nation to halt the drift into unsustainable borrowing.
“We cannot continue to borrow to pay salaries and support luxuries. Already, over 50% of our revenue is going towards debt servicing, not even debt repayments.
“We raise this alarm as responsible citizens and call on other lovers of Nigeria to speak up as we have no other nation to call our home, but Nigeria” -
Nigeria’s total debt stock rise to N24.9 tn in Q1, 2019
Nigeria’s total public debt rose to N24.947 trillion as at March 31, from N24.387 trillion as at Dec. 31, 2018, growing marginally by 2.30 per cent, the Debt Management Office (DMO) said.
A statement issued by the office on Wednesday in Abuja, said that the debt stock comprises of domestic and external debts of the Federal Government, the 36 States and the Federal Capital Territory (FCT).
It added that the debt which rose by N560 billion was accounted for largely by domestic debt which grew by N458.36 billion, while external debt also increased by N101.64 billion during the same period.
“In relation to the Debt Management Strategy, the ratio of domestic to external debt stood at 68.49 per cent to 31.51 per cent at the end of March.
“The total public debt to Gross Domestic Product (GDP) ratio was 19.03 per cent which is within the 25 per cent debt limit imposed by the government.”
The debt portfolio which was obtained from the DMO website showed that the Federal Government presently owes N13.1 trillion domestically, while the states and the FCT owe N3.97 trillion.
However, the external debt of the Federal Government, States and the FCT stood at N7.8 trillion.
Nigeria’s Total Public Debt Portfolio as at Q1, 2019
According to the states’ debt profile data released by DMO, Lagos recorded the highest domestic debt of N542.2 billion, followed by Rivers with N225.5 billion, Delta N223.4 billion and Akwa Ibom with N199.7 billion.
On the lowest rung are Yobe with N26.9 billion, Anambra N33.4 billion, Sokoto N36.5 billion, Jigawa N38.2 billion and Niger with N43.4 billion.
The data showed that Anambra, Borno, Ebonyi, Ekiti and Lagos profiles as at Dec. 31, 2018, indicated that they had not incurred any domestic debt in 2019.
Meanwhile, that of Rivers was at Sept. 30, 2018. -
Sad! Pastor evicted from residence over N2.7m debt
A Senior Magistrates’ Court in the Federal Capital Territory, Abuja, has ordered a cleric of Christ Embassy, Uduak Effiong, to be evicted from his apartment and pay the indebted sum of N2.7m.
The court also ordered him to pay 10 per cent interest from the date of judgment till liquidation.
The four-bedroomed semi-detached duplex is said to be located at 5th Avenue, 24th Street, Block D 20, Flat 2 in Games Village, Abuja.
Uduak, a banker and Chairman of Gufax Microfinance Bank in Uyo, Akwa Ibom State, is also the Chief Executive of Gufax Bureau de Change, Messrs Faduk Resources Industries Limited and many other companies.
Delivering judgment in a suit with Number CV/54/18 filed by Neth and Etua Limited, Senior Magistrate Ahmed Ndajiwo also gave N50,000 cost against him.
The judgment read: “That the defendant shall deliver vacant possession forthwith to the plaintiff, the four-bedroomed semi-detached duplex with appurtenances thereto lying and suites at 5th Avenue, 24th Street, Block D 20, Flat 2 in Games Village, Abuja, FCT.
“That the defendant pays the plaintiff the sum of N225,000 only monthly, being manse profit and commencing from October 1, 2018 until possession is given up by the defendant.
“Ten per cent of the judgment sum as interest is awarded to the plaintiff for the use and occupation of the said premises by the defendant from the date of the judgment until liquidated.
“And based upon the judgment of exhibit C, before the court which was not controverted, I will award the cost of N50,000 against the defendant for the plaintiff in this suite.”
But Uduak, through his solicitor, Benjamin Nwaokenye, has gone to the FCT High Court seeking an order for the stay of further execution of the judgment delivered by the lower court.
Among the items being appealed to be repossessed by him include a 20KVA sound-proof generator set, a sport-utility vehicle, cooking gas and deep freezer.
Uduak said, “With the fate that has befallen me, my business and family life will be rendered completely dysfunctional if I have to settle the balance of N1,300,000 rent in one-off payment, and still need to pay for an alternative accommodation.”
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Photo: AMCON takes possession of luxury homes in Lekki over N12.9b debt
The Asset Management Corporation of Nigeria (AMCON) on Tuesday took over several multi-billion naira properties in Victory Park Estate, Lekki, Lagos, following a N12,966,510,191 judgment debt it won at the Court of Appeal in Lagos.
The properties included assets of Knight Rook Limited situated within Victory Park Estate, among other assets.
AMCON’s move followed the dismissal of an appeal filed by Revd Olajide Awosedo against an October 3, 2017 judgment of the Federal High Court in a suit marked FHC/L/CS/744/17 – Asset Management Corporation of Nigeria v. Knight Rook Limited & Ors.
The appellate court also awarded a cumulative sum of N12,966,510,191 in favour of AMCON against Knight Rook Ltd, Grant Properties Ltd, Revd Olajide Awosedo, Olawunmi Olajide-Awosedo, Abimbola Olajide-Awosedo and Fibigboye Estates Ltd.
AMCON officials and Sheriffs of the Federal High Court, Lagos were protected by a detachment of Police officers as they enforced the June 3, 2019 judgment.
The Sheriffs told residents of the estate that they were on lawful duty to execute the Federal High Court judgment against the assets of certain entities, which were allegedly indebted to a consortium of banks, but which debts were taken over by AMCON.
Some residents on condition of anonymity, confirmed the development.
They noted that they were aware of court actions on the alleged debt and the collateral land, as well as the judgment, adding that many of the residents who had earlier acquired titles from the alleged debtors were affected by the judgment.
Others stated that they were in receipt of an official statement by AMCON to residents, notifying them of the appellate court judgments, upholding the lower court judgment.
The statement reads in part: “AMCON hereby notifies all Occupiers, Residents and all persons laying claim to any portion of land comprised within the Victory Park Estate, Lekki, Lagos that on 3rd June 2019, the Court of Appeal (Lagos Division) in the Appeal No: CA/L/146/18 dismissed the Appeal filed by Rev Olajide Awosedo against the Judgment of the Federal High Court delivered on 3rd October 2017 in the Suit No: FHC/L/CS/744/17 – Asset Management Corporation of Nigeria v. Knight Rook Ltd & Ors, by which a Judgment sum of N12,966,510,191 was cumulatively awarded in favour of AMCON against Knight Rook Ltd, Grant Properties Limited, Rev Olajide Awosedo, Olawunmi Olajide-Awosedo, Abimbola Olajide-Awosedo and Fibigboye Estates Ltd .
“Which judgment also specifically foreclosed the Defendants’ right to the assets of Knight Rook Limited comprised within Victory Park Estate, Lekki, Lagos, among other assets, in satisfaction of the Judgment, which Judgment has been executed by AMCON.”
The statement further directed all persons affected by the judgment and enforcement to contact AMCON through its Solicitors or its Receiver/Manager.
It was gathered that some of the affected residents had since resolved with AMCON by ratification, while others were about taking steps to do same.
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Ex-Zamfara gov, Yari denies leaving N252bn debt for Matawalle
Former Zamfara State Governor Abdul Aziz Yari Abubakar has debunked allegations of leaving behind N252 billion debts to Governor Bello Muhammad Matawalle.
Yari said he left over N7 billion for the take-off of the Matawalle’s administration.
The former governor, who spoke through his media aide, Malam Ibrahim Dosara, at the APC secretariat in Gusau, added that paid a debt of over N45 billion left behind by the administration before him.
Yari was reacting to the allegation by the Chairman of PDP Transition Committee, Malam Ibrahim Wakkala, that he left behind over N252 billion.
The allegation, the former governor said, could not be swept under the carpet.
He stressed that the Zamfara people enjoyed dividends of democracy under him with the inauguration of projects by President Muhammad Buhari, All Progressives Congress (APC) stalwart Asiwaju Bola Ahmed Tinubu and many more prominent dignitaries.
Yari stressed that the allegations were baseless and an effort to smear his image.
He said that it was astonishing to note that Wakkala who was his deputy and Chairman, Zamfara Stare Tender Board could not differentiate between ongoing projects, awarded projects and what should be addressed as liabilities and debts.
His media aide said: “No bank loan was left or obtained by the Ministry of Finance under Governor Abdul Aziz Yari and left behind as debt to the present administration.”
On education, he said: “There were debts inherited by Yari from the administration before him and his administration on inception met with the various examination bodies, which Wakkala claimed Yari’s administration owed. Yari negotiated with the bodies to pay the debt by instalments.”
The former governor explained that his government paid the examination and tuition fees of Zamfara State students.
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Over 50% of Nigeria’s revenue goes into debt servicing — AfDB
The African Development Bank has said debt servicing gulps more than 50 per cent of Nigeria’s revenue.
The bank said this in its West Africa Economic Outlook 2019.The AfDB said though the average revenue spent by West African countries on external debt servicing is 17 per cent, that of Nigeria is about 50 per cent and Ghana 40 per cent.
It added with the increasing domestic debt burden, the percentage of revenue spent on debt servicing in Nigeria was even higher.
The bank said the country’s debt burden had increased by as much as 128 per cent in the last eight years, with Nigeria’s debt to Gross Domestic Product remaining low.
The AfDB said: “Cape Verde had the highest external debt-to-GDP ratio in 2018, an estimated 103 per cent, followed by Senegal, Niger, and Sierra Leone. Liberia had the highest rate of debt accumulation between 2010 and 2018, at 329 per cent, followed by Nigeria at 128 per cent.
“Despite the increase, Nigeria still has one of the lowest external debt-to-GDP ratios, at 15.2 per cent. Benin, Guinea-Bissau and Togo also have a ratio below 25 per cent.
“The rapid increase in external indebtedness remains a challenge, especially given the shift toward non-concessional external debt. Debt service payments have also increased since 2010 and are projected to remain high in the medium term.
“The increase has heightened the fiscal burden in an already fiscally and growth-constrained environment. This raises important concerns regarding the sustainability of external debt. West African countries spend an average of 17 per cent of revenue on servicing external debt.
“In Nigeria, about half of the revenue is used to service external debt. The increasing domestic debt burden means that the total proportion of the revenue spent on servicing debt is even higher. In a country where only six per cent of GDP is collected in revenue, the high burden of debt service is a major concern.
“Ghana falls into a similar category, with debt service accounting for 40 per cent of revenue. The rising debt burden drove up to the proportion of revenue allocated to servicing external debt to about 500 per cent. This is a country once hailed as an example of a state with a strong commitment to structural and macroeconomic reforms in the post-Heavy Indebted Poor Countries debt relief initiative.”
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N5.4tr debt: AMCON seeks alternative recovery plan
The Asset Management Corporation of Nigeria (AMCON) is seeking better ways to recover the over N5 trillion debts.
The corporation will be exploring the Alternative Dispute Resolution (ADR) option that involves out-of-court settlement.
About 80 per cent of the debts is owed by 350 individuals.
Leading jurists have also urged AMCON to embrace the opportunities offered by ADR Centres established by the Federal High Court.
Speaking in Abuja at the weekend, Justice I. N. Buba, Justice A.M. Liman; Justice C.M.A. Olatoregun; Justice B.F.M. Nyako; Justice Nnamdi Dimgba, Dr. Chuka Agbu and Mr. Olugbenga Bello, among others, urged the assets managers to refer some of its cases to ADR as that could provide faster ways towards recovery, rather than wait endlessly for the courts, especially now that the corporation has over 3,000 court cases and counting, with imminent sunset date fast approaching.
The lawyers spoke at the Abuja version of the 2019 Annual Seminar for External Solicitors and Asset Management Partners (AMPs) of AMCON, which ended at Sheraton Hotel, Abuja at the weekend.
Justice Buba, who chaired one of the sessions said, “Every judge is supposed to promote ADR because it is faster. ADR was set up to help the courts. If you say you don’t want ADR, then you have to be ready to waste your time in court. It is not that the courts deliberately delay your cases, but the courts are overwhelmed by the barrage of cases before them.”
Justice Nyako, who also chaired a session, urged AMCON lawyers to familiarise themselves with the legal procedures before appearing in court.
He was commenting on why cases pile up in courts.
She said: “If a lawyer handling AMCON case does not follow procedure, the case will not take off. But to help ease off the pressure, the Federal High Court is trying to establish three more ADR centres for ease of dispensing justice.
”Once the ADR centres are open, I want to encourage our lawyers to refer some of these AMCON cases to the ADR centres and help decongest the courts.”
AMCON Managing Director/Chief Executive Officer Ahmed Lawan Kuru lamented the huge outstanding debt of the corporation of over N5 trillion, which will eventually become a burden to the Federal Government if at sunset AMCON fail to recover them.
Urging AMCON lawyers to sit up, especially in the face of hard fighting obligors, he added: “We have noticed increased incidence of obligors taking advantage of the appeal process to deny us the benefit of favourable judgments obtained.“Going forward, we should be conscious of the availability of the opportunity to request the courts to order litigants to deposit judgment consideration with the court registrars. This will mitigate the practice of obligors deliberately dragging their matters in court.”
He urged the AMCON council and the AMPs to take advantage of the special provision on accelerated hearing of AMCON matters since the Practice Rules allow the courts to sit from day-to-day at their discretion.
Kuru said: “The starting point for all our external lawyers and AMPs is the AMCON Act. If you are not familiar with the provisions of the AMCON Act, you will not be able to understand why AMCON is a unique institution.
“The essence of enacting a special legislation for the establishment of AMCON and the regulation of its operations is to remove it from the established common law principles and procedure of debt recovery. Therefore, it is essential for our lawyers and AMPs to be abreast with the AMCON Act and Practice Rules.”
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N24.39tr debt profile: Why Nigerians do not have to worry – Finance Minister
The Federal Government has said the nation is not in any way near a debt crisis despite its current N24.39 trillion (about $79.44 billion) debt profile.
The debt figure, which, as at December 31, 2018, comprised Eurobond loans, facilities from the World Bank Group, China and Africa Development Bank Group constitute over 80 per cent of the total debt stock.
It represents a year-on-year growth of 12.25 per cent and is higher than the 2017 figure by N2.662 billion.
Finance Minister Mrs. Zainab Ahmed, who made the disclosure at the sidelines of the just-concluded International Monetary Fund/World Bank Spring Meetings in Washington D.C, explained that despite warnings by the multilateral institutions, the country was not in any way near a debt crisis.
Her position was collaborated by FSDH Research latest report on Nigeria’s debt position titled: Is Nigeria public debt too high? Analysts at the Lagos-based investment company argued that since Nigeria’s public debt-to-Gross Domestic Product (GDP) ratio was still under 20 per cent, precisely 18.89 per cent, it can still get more loans to reach the 25 per cent benchmark set for itself and the 56 per cent international threshold set for countries in Nigeria’s peer group.
The analysts at FSDH Research said Nigeria still has room to borrow an additional N7.89 trillion before reaching a threshold of about N32 trillion.
FSDH Research data showed that countries like China, South Africa, India, UK, Brazil and the United States (U.S.) all have high debt-to-Gross Domestic Product (GDP) of 50 per cent, 57 per cent, 70 per cent, 87 per cent, 88 per cent, 91 per cent and 106 per cent respectively.
It, however, stressed that these countries have successfully managed to deploy their borrowings into activities that can stimulate revenue generation including education, transportation, construction, security, technology and other growth-enhancing infrastructure.
The FSHD report explained that by utilising the borrowed funds in areas that improve the ease of doing business in their countries, they have been able to grow their economies further, create job opportunities, and create more avenues for their governments to grow their revenue.
It said: “The 25 per cent benchmark gives Nigeria a leeway to borrow an additional N7.89 trillion given her level of GDP. But before you are quick to celebrate, there is the need to consider one very important factor: the ability of the country to service the debt without causing untold hardship on the country.
“In measuring the ability of a country to service her debt obligations, we look at the ratio of domestic debt service-to-Federal Government of Nigeria Federation Accounts Allocation Committee (FAAC) allocation.”
The IMF had during the Spring Meetings warned Nigeria and other emerging market countries taking excessive loans from China to consider the terms of such facilities, especially, their compliance to the Paris Club arrangements.
Director, IMF Monetary and Capital Markets Department, Tobias Andrian, said there was nothing bad in borrowing from China, except that the terms of such loans are always questionable.
He said: ‘Loans from China are good, but the countries should consider the terms of the loans. And we urge countries that when they borrow from abroad, that the terms are favorable for the borrower, and should be conforming to the Paris Club arrangements”.
Continuing, Andrian, who spoke on the Global Financial Stability Report (GFSR) said: “Let me reiterate that in many frontier markets, we see that the share of debt that is not conforming to the Paris Club standards is on the rise. And that means that if there is any debt restructuring down the road one day that can be very unfavorable to those countries. So, the borrowing terms, the covenants, are extremely important. And we do see a deterioration in that aspect.”
But Mrs. Ahmed explained that while government borrows to deliver on its promises, it is also mindful of rising debt burden, which eats up about 25 per cent of the country’s annual earnings.
The minister said: “The World Bank and IMF are cautioning us on the rate at which we are borrowing. They are also cautioning us on the need to build fiscal buffers because the global economy is going to be facing some risks and we agree with that.
“We are very mindful of the level of our borrowings. Our borrowing is very much within fiscal limits right now. What we are doing is to increase our revenue generating capacity to make it easier for us to meet our debt obligations, routine and capital expenditure.”
Responding to concerns on Chinese loans to finance the Idu-Kaduna, Lagos-Ibadan and Abuja light rail projects, expansion of four airport terminals and some hydroelectric projects across the country, the minister said: “To borrow, we go through several processes of assessments as well as negotiations. We make sure we get the best possible terms and whether we are borrowing from financial institutions or in Europe or China or anywhere else, we try to get the best rates of borrowing. So far, the conditions we have got are very good ones.”
Ahmed said the government of President Muhammadu Buhari is committed to ensuring that the country grows in a manner that would bring many people out of poverty.
According to her, it is for this reason that the government takes its social investment programmes like the school feeding, Conditional Cash Transfers to the poor and vulnerable and TraderMoni programme, very seriously.
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AMCON takes over Micmerah International over N1bn debt
The business and assets of Micmerah International Agency Limited have been taken over by the Asset Management Corporation of Nigeria (AMCON).
The company was seized by AMCON over its alleged inability to pay a debt worth N1 billion it owes, a statement from AMCON stated.
AMCOM took over operations of the Onitsha, Anambra State-based firm based on the directive of a Federal High Court sitting in Awka, the Anambra State capital in Suits No. FHC/AWK/CS/101/2018 and No. FHC/AWK/CS/102/2018.
Already, the government agency has appointed Chief Tagbo Anieto as Receiver/Manager over the assets of Micmerah International Agency Limited.
Justice I.B. Gafai, who presided over the matter, granted AMCON the full possession as well as power of sale over the assets of Micmerah International Agency Limited now in the custody of AMCON.
AMCON had taken over the Non-Performing Loans (NPLs) of Micmerah International Agency Limited from various banks in line with its mandate under the AMCON Act.
All efforts to peacefully resolve the loan were allegedly frustrated by Mr Mike Emerah, the prime promoter of the company, which left AMCON with no other choice than to seek justice in the court of competent jurisdiction.
Head of Corporate Communications at AMCON, Mr Jude Nwauzor, stated that, “We saw it coming because the said debt is long overdue.
“As a responsible corporation, before we get to this stage with any of our obligors; we must have patiently tried to resolve the matter without going to court. Anytime we end up taking over assets by the order of the court such as in the case of Micmerah International Agency Limited, it means all efforts by AMCON to get the obligor to amicably repay the indebtedness have proved abortive.
“When you have exhausted all avenues of peaceful resolution, there is no other option available to AMCON than what has eventually happened, which is the commencement of enforcement action against Micmerah International Agency Limited as mandated by the court and as provided under Section 49-52 of the AMCON Act.
“If not, it would be difficult to take over those assets because the owner is very influential in Anambra State.”
It would be recalled that Mr Ahmed Lawan Kuru, Managing Director/Chief Executive Officer, AMCON late last year declared that the corporation after a critical evaluation of its recovery processes changed its resolution strategy to focus more on enforcement actions especially against recalcitrant and hard-core obligors that have vehemently refused to amicably meet their debt obligation to AMCON.