Tuesday, October 21, 2025
24.5 C
Lagos

Business

Troyka Holdings Chair, Biodun Shobanjo, Inducted into Loeries Hall of Fame

Nigeria’s foremost advertising leader and Chairman of Troyka Holdings,...

Zenith Bank, NEM, Seplat, AIICO, Dangote Cement, First HoldCo Recognised as Nigeria’s High-Performing Companies

L-R:    Michael Ani, Manager, Investor Relations, Dangote Cement; Oluseyi...

Finance Min, Wale Edun, to Keynote FiBOP Annual Confab Oct 18

The Honourable Minister of Finance and Coordinating Minister of...

Niteon Unveils First African Manufacturers Bank to Unlock $200bn Digital Export Market

Niteon, one of Nigeria's largest digital export marketplaces, has...

FG Boosts MSME Financing with NCGC Initiative

In a bid to boost economic growth and development,...

ICT

Konga Partners Verve to Delight Customers with Free Shopping Vouchers

  Konga, Nigeria’s leading composite e-commerce platform has partnered with...

NCC Spotlights Renewable Energy on World Consumer Rights Day

  The Nigerian Communications Commission (NCC) has concluded arrangements to...

Governors, NCC Set for Broadband Awareness Forum Oct 20

All Nigeria State Governors are set to discuss how...

VerveLife 5.0 Gears Up for Nairobi, Lagos Events

Following a successful series of Verve Life 5.0 satellite...

Telecom Infrastructure Critical to Successful 2023 Elections – Danbatta

The Executive Vice Chairman of the Nigerian Communications Commission,...

Capital Market

SEC DG: Commission Considering Gradual Implementation of ISSB Standards

The Director General of the Securities and Exchange Commission...

ISSB-Aligned Disclosures Will Lower Capital Costs, Attract Global Investors — SEC

The Securities and Exchange Commission (SEC) has unveiled plans...

SEC DG to Cadets:  Invest Early, Long Term to Create Wealth

Graduating Cadets of the Nigerian Defence Academy (NDA) have...

SEC DG: Accountability, Transparency will Boost Investor Confidence in Capital Market

The Director General of the Securities and Exchange Commission...

SEC DG: Digital Assets Represent $10tn Opportunity by 2030

The Director General of the Securities and Exchange Commission...

Insurance

13-year-old Rhema-Love Abraham Emerges Winner of 2025 Heirs Insurance Essay Championship

L:R- Funmi Olotu, National Coordinator, National Social Safety-Nets Coordinating...

Leadway Assurance: Insurance Company of the Year at 2025 BAFI Awards

L-R: Managing Director, Leadway Assurance, Gboyega Lesi; Publisher, BuisnessDay...

Heirs Insurance Group Announces Inaugural Travel Festival: A Call for Inclusive Travel Ecosystem for Africans

Heirs Insurance Group (HIG), Nigeria’s fastest-growing insurance group, has...

Sovereign Trust Insurance Celebrates 2025 Customer Service Week

Sovereign Trust Insurance Plc has been actively involved in...

Leadway: 55 Years of Innovation, Expanding Financial Access, Inclusion Across West Africa

Leadway, one of Nigeria’s foremost non-banking financial services and...

Business

Troyka Holdings Chair, Biodun Shobanjo, Inducted into Loeries Hall of Fame

Nigeria’s foremost advertising leader and Chairman of Troyka Holdings,...

Zenith Bank, NEM, Seplat, AIICO, Dangote Cement, First HoldCo Recognised as Nigeria’s High-Performing Companies

L-R:    Michael Ani, Manager, Investor Relations, Dangote Cement; Oluseyi...

Finance Min, Wale Edun, to Keynote FiBOP Annual Confab Oct 18

The Honourable Minister of Finance and Coordinating Minister of...

Niteon Unveils First African Manufacturers Bank to Unlock $200bn Digital Export Market

Niteon, one of Nigeria's largest digital export marketplaces, has...

FG Boosts MSME Financing with NCGC Initiative

In a bid to boost economic growth and development,...

ICT

Konga Partners Verve to Delight Customers with Free Shopping Vouchers

  Konga, Nigeria’s leading composite e-commerce platform has partnered with...

NCC Spotlights Renewable Energy on World Consumer Rights Day

  The Nigerian Communications Commission (NCC) has concluded arrangements to...

Governors, NCC Set for Broadband Awareness Forum Oct 20

All Nigeria State Governors are set to discuss how...

VerveLife 5.0 Gears Up for Nairobi, Lagos Events

Following a successful series of Verve Life 5.0 satellite...

Telecom Infrastructure Critical to Successful 2023 Elections – Danbatta

The Executive Vice Chairman of the Nigerian Communications Commission,...

Capital Market

SEC DG: Commission Considering Gradual Implementation of ISSB Standards

The Director General of the Securities and Exchange Commission...

ISSB-Aligned Disclosures Will Lower Capital Costs, Attract Global Investors — SEC

The Securities and Exchange Commission (SEC) has unveiled plans...

SEC DG to Cadets:  Invest Early, Long Term to Create Wealth

Graduating Cadets of the Nigerian Defence Academy (NDA) have...

SEC DG: Accountability, Transparency will Boost Investor Confidence in Capital Market

The Director General of the Securities and Exchange Commission...

SEC DG: Digital Assets Represent $10tn Opportunity by 2030

The Director General of the Securities and Exchange Commission...

Insurance

13-year-old Rhema-Love Abraham Emerges Winner of 2025 Heirs Insurance Essay Championship

L:R- Funmi Olotu, National Coordinator, National Social Safety-Nets Coordinating...

Leadway Assurance: Insurance Company of the Year at 2025 BAFI Awards

L-R: Managing Director, Leadway Assurance, Gboyega Lesi; Publisher, BuisnessDay...

Heirs Insurance Group Announces Inaugural Travel Festival: A Call for Inclusive Travel Ecosystem for Africans

Heirs Insurance Group (HIG), Nigeria’s fastest-growing insurance group, has...

Sovereign Trust Insurance Celebrates 2025 Customer Service Week

Sovereign Trust Insurance Plc has been actively involved in...

Leadway: 55 Years of Innovation, Expanding Financial Access, Inclusion Across West Africa

Leadway, one of Nigeria’s foremost non-banking financial services and...

BudgIT Queries $10bn Rise in Nigeria’s Public Debt Stock

BudgIT has chosen to express an opinion on the recent statement by the Vice President, Prof. Yemi Osinbajo that Nigeria’s public debt stock rose by $10 billion.

The organisation’s recent work on expanding public debt has armed her with facts to critically examine Nigeria’s debt stock profile.

We opine that the current rise of $10 billion in public debt stock does not tell the full story. To say the least, this can be misleading.  Arguments explaining that the entire Federation borrowed only N3 trillion in three years since the debt stock rose by $10 billion has been the trending narrative.

However, it is important to deconstruct the Federal Government (FG) debt into external and domestic debt to get a full understanding for purposes of accountability.

The total FG Debt Stock totals the sum of external debt and domestic debt.  The Debt Management Office figures showed that FG external debt alone grew from $7.34billion in June 2015 to $17.83billion in June 2018, that’s an additional $10.49billion in 3 years.

Domestic debt of FG as at June 2015 was N8.39trillion while it stood at N12.15trillion as at June 2018. That’s another increase of N3.76trillion in 3 years. At an exchange rate of N305/$, that’s $12billion. This means the total increase in external and domestic debt is $22billion.

It is public knowledge that the Naira was devalued in recent years, and this singular act shrunk and expanded a lot of indexes. Those who put forward $10billion are comparing the wrong values without adding the important information that exchange rates for the times are different. From our research, we have observed that this administration (FG alone) borrowed $22billion in three years but due to naira devaluation gains but total public debt stock (for the entire Federation) increased by $10billion, which makes current claims true.

However, it is important to state that it is true that public debt is now $73billion, grew by $10billion, because FG domestic debt in USD terms was $42.63billion in June 2015 and $39.75billion as at June 2018.

This does not mean that FG borrowed less domestic debt in 3 years. It only goes to show that the domestic debt of FGN grew from N8.39trillion to N12.15trillion from 2015 to 2018 respectively. Devaluing exchange rate from N196.95/$ to N305.7/$ made the domestic debt in 2018 relatively smaller in USD terms.

For clearer understanding, let’s use this analogy. It is like borrowing N1,000 in 2015 which is $5 at N200/$. If you borrow additional N500 at a new exchange rate of N300/$, you now owe N1,500 but you still owe an equivalent of $5.  It can then clearly be shown that the Naira equivalent of the total debt has risen from N12.1trillion to N22.4 trillion, a growth of N10.3trillion.

It is important to classify debt into two categories considering that external debt will be paid in USD or other currencies while domestic debt will be settled in Naira. This invariably has consequences for debt servicing costs in the near term.

It is hoped that this “marginal” increase in debt in USD terms does not unleash excessive borrowing by the Federation considering that public revenue in USD equivalent has also severely shrunk.

States’ domestic debt rose from N1.69 trillion in June 2015 to N3.477 trillion in June 2018. Adjusting this for USD also does not tell the full story. States debt costs are deducted in Naira equivalent at prevailing “official” rates.

However, devaluation provides adjusted gains especially for monies earned in USD such as oil & gas revenues but losses for those earned in Naira such as CIT & VAT, when converted to USD.

The devaluation of the Naira has impacted directly on the purchasing power of Nigerians, with income severely shrunk in Naira terms while those who export especially in non-oil sector have seen relative gains.

BudgIT believes that acquiring debt is not bad if put to judicious and profitable use for the citizenry but we request more transparency on self-liquidating capital projects that such borrowings are tied to. We believe Nigeria should expand total revenue to at least meet its recurrent costs, in line with the Fiscal Responsibility Act.

Hot this week

When Transparency Becomes Luxury: INEC and ₦1.5bn FOI Controversy

By Chike Walter Duru When the Independent National Electoral Commission...

Unity Bank Corpreneurship Challenge Beneficiaries Hit 578 as 30 More Winners Emerge

  No fewer than 578 young entrepreneurs across Nigeria have...

Polaris Bank Reinforces Commitment to Exceptional Customer Experience at Global Trade Forum in Ibadan

Chris Ofikulu, Executive Director, Retail & Commercial Banking, Polaris...

Fidelity Bank Bags Awards for Best Export, Trade Support and Innovation

  Fidelity Bank’s market leadership has been affirmed once again...

13-year-old Rhema-Love Abraham Emerges Winner of 2025 Heirs Insurance Essay Championship

L:R- Funmi Olotu, National Coordinator, National Social Safety-Nets Coordinating...

Topics

Nigeria Re Names Gbenga Falekulo as New CEO

  Mr. Gbenga Falekulo Managing Director/CEO Nigeria Reinsurance Corporation Mr. Gbenga Falekulo has...

Market Statistics: Wednesday, 15th November 2017

Market Cap (N'bn)                12,673.2 Market...

Fight Against COVID-19: Ecobank Commends Doctors, Nurses, Security Operatives

    Managing Director, Ecobank Nigeria, Patrick Akinwuntan has commended those...

Transparency Shall Be Our Bedrock in Telecom Regulation – Maida

The Executive Vice Chairman of the Nigerian Communications Commission...

COP 28: Kyari Makes Case for a Just Energy Transition for Africa

L-R: President/CEO, EQT Corporation, Toby Rice; GCEO NNPC Limited,...

NCDMB Unveils Nigerian Content Fund Certificate, Empowers 130 firms with $400m NCI Fund

The Nigerian Content Development and Monitoring Board has introduced...

Seplat Explains Incident Involving Depthwize Majestic Rig near Ovhor, Delta State

Seplat Energy provides an update to the previous announcement...

Deutsche Bank Awards Ecobank Nigeria with Client Excellence Award

Ecobank Nigeria, an affiliate of Ecobank Group, has been...
Exit mobile version