The Federal Government has disclosed it released over N6396 trillion to the state governments in the past seven years in various interventions and their supports to aid their fiscal responsibilities.
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed disclosed this while briefing the press on her ministry’s scorecard in the past seven years.
She said a “total of N5.03 trillion plus an additional $3.4 billion (about N1,509,600,000,000) has been released to States by the Federal Government over the life of this administration” cumulatively amounting to about N6.539trn.
Perhaps this disclosure is to deepen the conversation around the states aiding poverty through misplaced priorities and frivolous projects.
She said “the support covers the 13% Derivation Refund to Oil Producing States, refund for Construction of Federal Roads, Ecological Support, Support from the Development of Natural Resources Fund, Paris Club refunds, Support from the Stabilisation Fund, COVID intervention amongst others.”
She also indicated that “each of these payments has distinct repayment terms with some given as grants and others as loans with favourable repayment terms including a long amortisation period.”
The finance minister also indicated that Nigeria isn’t broke and it is meeting ots debt obligations. ““Nigeria isn’t broke. We continue to generate revenue on a month basis and these revenues are distributed at FAAC. We also disclose how much is distributed monthly to the three tiers of government.”
She indicated that even though the federal government isn’t earning enough, its revenue position is improving with oil thefts now reducing and production picking up to 1.3 million barrels per day.
She also said Nigeria’s debt level is sustainable.
“There is a debt management board chaired by the Vice President. The debt management strategies are being followed judiciously. At 33 percent to GDP, we are still the lowest within countries that are our comparatives” she stated
“But again, I still say we have a revenue problem in spite the increase in non-oil revenue because our performance 8-9 percent of GDP, the revenue is not enough. We are a population of about 200 million who deserve service. Our consumption level is low. So. we need to keep looking ways to incentivize the business so MSMEs who are the largest contribution to labour and economy continue to grow.
On support to developments in the states, the Minister said a “total of N5.03 trillion plus an additional $3.4 billion has been released to States by the Federal Government over the life of this administration.”
According to her, “the support covers the 13% Derivation Refund to Oil Producing States, refund for Construction of Federal Roads, Ecological Support, Support from the Development of Natural Resources Fund, Paris Club refunds, Support from the Stabilisation Fund, COVID intervention amongst others.”
According to data from the Debt Management Office (DMO), the total Public Debt Stock, representing the Domestic and External Debt Stocks of the Federal Government of Nigeria (FGN), the thirty-six (36) State Governments and the Federal Capital Territory (FCT), was N42.84 trillion (USD103.31 billion) as at June 30, 2022. The comparative figures for March 30, 2022, was N41.60 trillion (USD100.07 billion).
The Total External Debt Stock was USD40.06 billion (N16.61 trillion) as at June 30, 2022, while total Domestic Debt Stock as at June 30, 2022, was N26.23 trillion (USD63.24 billion) due to New Borrowings by the FGN to part-finance the deficit in the 2022 Appropriation Act.
She also said the restructuring of the Ministry of Finance Incorporated (MOFI) which manages Government Owned Enterprises (GOEs) and government-linked companies (GLCs) will be revamped to drive value creation.
She said the different asset classes or investments of the FGN. MOFI’s current portfolio consists of 130 corporate entities valued at about N19 trillion. The goal in the next 10 years is to grow MOFI’s Assets Under Management (AUM) to about N34 trillion and drive a minimum annualized average return of 15%.