Category: Business

NIGERIA’S total public debt rose to N25.7trillion ($83.882billion) by the end of June 2019, according to the Debt Management Office (DMO).

This is an increase of about N753billion over the N24.947trillion reported by the government agency as the total debt as of the end of March.

According to the figures released by the DMO on its website on Tuesday, the total debt stock is made up of both foreign and domestic debts of the federal and state governments. While the Federal Government’s debt stood at N20.5 trillion ($66.75 billion), that of the 36 states and the FCT was N5.3 trillion ($17.2 billion) by the end of June.

A breakdown of the debts provided by the DMO shows that the country’s total external debt stock stood at N8.3 trillion ($27.162billion) with the Federal Government owing N7 trillion ($22.9billion), while the 36 states and the Federal Capital Territory (FCT) owe N1.3trillion, ($4.274 billion)

As of the end of June, domestic debt stood at N17.4 trillion ($56.7 billion). While the Federal Government’s owes N13.4 trillion ($43.8 billion), states and the FCT owe N4trillion ($12.9billion).

Although many Nigerians have expressed concern over the nation’s rising debt profile, the Minister of Finance, Budget and National Planning, Zainab Ahmed, said the country’s problem was not debt but revenue.

The Consumer Price Index released by the National Bureau of Statistics on Tuesday showed inflation index rose to 11.24 per cent in September, barely a month after the border closure.

The 11.24 per cent represents an increase of 0.22 per cent when compared to the 11.02 per cent recorded in August.

The prices of food items have been on a steady increase since August when the Federal Government closed Nigeria’s borders to the neighbouring countries.

The NBS report stated that increases were recorded in all the divisions that determined the index. It said the food  index  rose  by  13.51  per cent  in  September   compared to  13.17  per cent  in  August. It said the rise  in  the  food  index  was  caused  by  increases  in  prices  of  bread  and  cereals,  oils  and  fats,  meat, potatoes, yam and other tubers, fish and vegetables.

The NBS report read in part, “The  consumer  price  index,  which  measures  inflation  increased  by  11.24  per cent  year-on-year  in September 2019.

“This is 0.22 per cent points higher than the rate recorded in August 2019 (11.02) per cent.On  month-on-month  basis,  the  headline  index  increased  by  1.04  per cent  in  September  2019;  this  is  0.05 per cent rate higher than the rate recorded in August 2019 (0.99) per cent.”

In the same vein, the Lagos Chamber of Commerce and Industry noted that the border closure could have recorded a drastic reduction in smuggling of rice, and petroleum products among others. It, however, lamented that genuine businessmen who transacted legal business in the sub-region were victims of the border closure.

The LCCI who spoke through its Director-General, Muda Yusuf, in a statement noted that the government might mean well, but there were many businesses in the informal sector that had been adversely affected.

It read in part, “The closure of Nigerian land borders for close to two months now has come with benefits and costs.  There are upsides and downsides.  Reports indicate a drastic reduction in smuggling of rice, poultry products and sugar.  The smuggling of petroleum products outside the country to neighboring countries has also declined considerably.  We note and appreciate these outcomes.

“But it is important to reckon with the costs, supply chain disruptions and losses that businesses and individuals have suffered as a result of the closure.  “Corporates, large number of informal sector players and individuals doing legitimate businesses across the borders have become victims of the border closure.

“This poses a dilemma. The government means well, but there are many innocent casualties.

“As we celebrate the benefits, we should also count the costs.  Jobs have been lost; prices have skyrocketed; legitimate exports to the sub-region have been halted; intermediate products for some manufacturers have been cut off and some multinationals companies have been de-linked from their sister companies in the sub-region.”

It added that the economies of border communities had been paralysed with consequences for unemployment and poverty, stating that over 90 per cent of Nigeria’s trade with the  West African sub- region was by road.

“We export manufactured products as well as agricultural products – detergents, toothpastes, plastic products, steel products, kitchen utensils, grains, ginger, onions, among others.

“We also undertake many exports to the sub-region.  These are sources of livelihood of Nigerians doing legitimate business.  There are also thousands of transporters who make a living from these legitimate trading activities.   These are costs that would run into hundreds of billions of naira.  We must weigh the costs and benefits.”

Most often, the LCCI noted, the government failed to count the cost of government policy on the citizens and businesses.

However, President Muhammadu Buhari on Tuesday in Abuja reiterated that the border closure was an effort to support farming, fisheries and livestock sectors.

The President, represented by the Vice- Chairman of National Food Security Council and governor of Kebbi State, Abubakar Atiku Bagudu, said this during the 2nd National Unity Food Fair 2019 organised by the National Council of Women Societies in collaboration with Travel Marketing Partners (Nigeria) Limited.

The President said he was not aware of protests against the closure of the nation’s borders, adding that the decision had been embraced by farmers who were already happy over it, as demand for locally produced foods had increased.