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Endless Borrowing: Okonjo-Iweala, Zainab Ahmed Says Nigeria Will Keep Borrowing

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The Minister of Finance, Budget, and National Planning, Zainab Ahmed, and the Director-General of the World Trade Organisation, Dr. Ngozi Okonjo-Iweala, on Wednesday, disagreed on the nation’s debt-to-gross Domestic Product ratio, aso Naija reports.

Professionals spoke to newsmen and also expressed worry over the nation’s rising debt profile.

While Ahmed put the debt-to-GDP ratio at 29 percent, Okojo-Iweala said it had risen to 35 percent.

Both the minister and the WTO boss spoke at the African Development Bank High-Level Knowledge Event with the theme: ‘From Debt Resolution to Growth: The Road Ahead for Africa’ which was held virtually on Wednesday.

Ahmed also disclosed that Nigeria planned to borrow more money to fund its infrastructure capacity.

This is despite voices calling on the government to halt borrowing and concentrate on other means of raising funds for the infrastructure needs of the country.

According to the Debt Management Office, Nigeria’s total public debt portfolio rose from N12.12tn in June 2015 to N33.11tn as of March 31.

READ ALSO: Former Minister, Dalung Lists Buhari’s Problems

Ahmed said the government was enforcing fiscal discipline to expand its fiscal space so that it could continue to service its debts and borrow more to build the nation’s infrastructure capacity.

She said, “As of Q1 2021, we have about a 29 percent debt-to-Gross Domestic Product ratio. In terms of the level of debt, we are still very healthy, and sustainable.

“We are struggling with revenues, which is what we need to pay our debts. We have put in place several measures to enhance domestic revenue.

“We are cutting costs, we are improving the ease of doing business, trying to leverage private sector resource capacity to invest in infrastructure to reduce government spending.

“We are working on increased transparency in public financial management; we are enforcing fiscal discipline to expand our fiscal space so that we can continue to service our debt and borrow more to build our infrastructure capacity.”

Ahmed also said that the total debt profile did not include that of some states and that the federal government was making moves to correct that.

“In Nigeria, we’ve been making a lot of effort every quarter to disclose all the debts that we have and to also indicate what the debt service is.

“Currently, we are working on including other state-owned debts that have not been included in public debt for transparency. It is important and will help us going forward.”

However, Ngozi Okonjo-Iweala, who also attended the AfDB’s event, differed with Ahmed on the nation’s debt-to-GDP ratio.

The WTO boss who had been Nigeria’s Minister of Finance in the past said the nation’s debt to GDP ratio had risen from 29 percent to 35 percent.

She said, “Middle-income African countries have also seen their debt burdens increase sharply. Amid falling prices and demand for oil worldwide, Nigeria’s debt to GDP ratio rose from 29 to 35 percent; Algeria from 46 to 53 percent, and Egypt from 84 to 90 percent, Angola from 107 to 127 percent.

“Debt to GDP ratios also increased for non-oil exporters including South Africa from 62 to 77 percent. Morocco from 65 to 76 percent.”

Okonjo-Iweala also said that scarce foreign exchange in certain African countries was creating scenarios where the governments were using scarce forex to fund the fund debt repayment rather than on capital investment.

“Even where debt to GDP or where debt to export ratios was not very high, tighter access to dollar financing because of the COVID-19 crisis means we are already seeing places where scarce foreign exchange is going to fund debt repayment instead of capital investment,” she added.

A professor of economics at the Olabisi Onabanjo University, Ago-Iwoye, Ogun State, Sheriffdeen Tella, described as a cause for worry the amount being spent by the government on debt servicing.

He said, “What is important is not even the debt-to-GDP ratio but the ability to pay, and we are presently in serious problem with payments.

“If they want to borrow money from internal sources, that could be understood. But if they are going international again, I think it is not proper because presently the level of international borrowing is what is giving them problems now.

“We are selling oil and making money but we are using that money to service the debts that we owe, and that is unfortunate.

“So, one cannot but be a worry. So, the government should think about creating wealth rather than continue borrowing. If they need money badly, they should borrow domestically.”

Prof. Akpan Ekpo told one of our correspondents that there was an urgent need for the government to be more transparent concerning borrowing.

He said, “There is nothing bad in borrowing but you need to borrow to fund infrastructural projects that will pay their way.

“Looking at debt-to-GDP ratio can be quite misleading because we debased our GDP making the denominator very large compared to the numerator. Instead, we should use debt servicing to GDP ratio and debt to revenue ratio, which at the current rates are disturbing.”

Ekpo added, “FG needs to do more feasibility studies on these infrastructural projects before borrowing to fund them.

“Infrastructural projects like power and others have positive multiplier effects in the long run. For the debt acquisition, they also need to be more transparent on it too.”

President of the AfDB, Akinwumi Adesina, said that cumulative total debt in Africa was higher than cumulative government revenue.

According to him, in 2019, Africa’s total outstanding debt was $841.9bn, while total government annual revenue was $501bn.

Adesina said, “Africa’s GDP declined by 2.1 percent in 2021. Growth is projected to recover to 3.4 percent by 2021 and 2022. Africa’s cumulative GDP declined by $145bn to $190bn.

“Millions fell into extreme poverty on the continent. Thirty-nine million Africans could fall into poverty by the end of 2021.”

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Keep Quiet During An argument With Your Husband — Minister of Women Affairs 

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The Minister for Women Affairs, Uju Kennedy-Ohaneye, has advised women in the country not to argue or talk when having arguments with their husbands, Aso Naija gathered.

The minister during a Conference of Commissioners of State Ministries of Women Affairs in Nigeria on Wednesday in Abuja, said avoid trading words would prevent physical assault that may lead to injury or death.

The conference was organised by the Rule of Law and Anti-Corruption (RoLAC) Phase II Programme and funded by the European Union through the International Institute for Democracy and Electoral Assistance (International IDEA).
“I am equally begging my women not to look for trouble, not even at home. Maintain peace in your home because if a home is peaceful, the woman has 80 percent to contribute to that. If you need peace, you can equally achieve it.

READ ALSO:NLC Puts Nationwide Protest on Hold, Extends Ultimatum to March 13

Keep your mouth shut. Talking back does not yield fruit, rather it leads to death and destruction, it leads to bringing up bad children for society. Keep your mouth shut, it does not make you a fool but a wise person. When the man is shouting and saying all sorts of things, act like a fool and keep your mouth shut.

After a while, watch him. If he is a good man, he will come back to apologise. If he is not a good one, ignore him. Have what you want to do in your mind, but when we show who we are and we fight back, most times, it leads to hitting; you could be injured.

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Ozekhome Warns: Naira-Dollar Exchange Rate Could Reach N4000 Before Year End under Tinubu Government

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According to lawyer and human rights activist, Mike Ozekhome, SAN, the current government led by Bola Tinubu has exacerbated the poverty levels in Nigeria.

During a live program on Channels TV, Ozekhome emphasized the urgent need for President Tinubu and his team to address the economic challenges faced by the country, as they had campaigned on the promise of renewing people’s hope during the 2023 election period.

Ozekhome also expressed his dissatisfaction with the government’s habit of blaming past administrations for Nigeria’s problems, stating that they should instead focus on innovative approaches to tackle these issues.

He highlighted the recent payment of $400 million and the increase in reserves to $34 billion, but cautioned that without careful intervention, the Naira may reach an exchange rate of N4000 to the dollar before the end of the year.

READ ALSO:NLC Puts Nationwide Protest on Hold, Extends Ultimatum to March 13

NLC Puts Nationwide Protest on Hold, Extends Ultimatum to March 13

 

Drawing a comparison to the situation in Ghana, where citizens carried baskets of cedis to purchase goods, Ozekhome questioned the rationale behind allowing the Bureau de Change (BDCs) to control the economy from under trees and tables.

He found it particularly disconcerting that officials of the current government continue to blame the Jonathan administration, which left office in 2015, even though they themselves took over from the same administration in the All Progressives Congress (APC) government.

Ozekhome concluded that the current state of affairs represents renewed poverty rather than renewed hope, and called on the government to engage in fresh thinking and innovative solutions to address the nation’s challenges.

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NLC Puts Nationwide Protest on Hold, Extends Ultimatum to March 13

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The Nigeria Labour Congress (NLC) has decided to temporarily suspend its planned nationwide protest and has extended the ultimatum it issued to the federal government until March 13, Aso Naija Reports.

Initially, the labor union had announced a two-day nationwide protest to draw attention to unmet demands by the federal government and the prevailing hardships experienced across the country.

READ ALSO:BREAKING: Central Bank of Nigeria Raises Interest Rate to 22.75%

BREAKING: Central Bank of Nigeria Raises Interest Rate to 22.75%

However, following the conclusion of its National Executive Council meeting today, the NLC released a communique stating that the objectives of the protest were effectively achieved on the first day of the demonstration.

As a result, the NLC has chosen to put the protest on hold for now and has extended the deadline for the federal government to address the labor union’s concerns until March 13.

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Lagos Announces 24-hour Total Closure Of Third Mainland Bridge

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The Federal Ministry of Work will embark on a total closure of the Third Mainland Bridge for 24 hours on Wednesday, February 28 to 12 noon on Thursday, February 29, to allow the contractor execute a major aspect of the ongoing repair works on the bridge, Aso Naija Reports

 

The closure by the Federal Ministry of Works was announced in a statement by the Lagos State Commissioner for Transportation, Oluwaseun Osiyemi.

The commissioner advised all road users to use alternative routes already provided during this period as the bridge would not be opened to traffic for 24-hours.

READ ALSO:Court Asks Nigerian Government To Submit List Of Witnesses For Treason Charges Against Nnamdi Kanu

Court Asks Nigerian Government To Submit List Of Witnesses For Treason Charges Against Nnamdi Kanu

Osiyemi assured road users that the traffic management officials would be on ground to manage traffic and minimise inconveniences.

Repair works have been ongoing on the bridge since January with partial closures for in and outbound traffics.

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Court Asks Nigerian Government To Submit List Of Witnesses For Treason Charges Against Nnamdi Kanu

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The Nigerian government has been directed by the Federal High Court in Abuja to submit a list of witnesses in order to support the charges of treasonable felony against Nnamdi Kanu, the detained leader of the Indigenous People of Biafra (IPOB), Aso Naija Reports.

This development was revealed by Barrister Aloy Ejimakor, the special counsel representing Nnamdi Kanu, after filing a fresh bail application seeking his client’s release.

According to Ejimakor, the court is prepared to commence the hearing stage of the trial and has instructed the prosecuting team to file all necessary documents, including witness statements on oath.

The court’s ruling on the bail application is scheduled for March 19, 2024, and until then, the judge will decide whether or not to grant bail.

Nnamdi Kanu’s special counsel, Barrister Aloy Ejimakor revealed this on Monday after he filed a fresh bail application to secure the release of his client in court.

He said the court is ready to open the hearing stage of the trial and has ordered the prosecuting team to file all their processes including their witnesses’ statements on oath.

He said, “Her lordship said the ruling had to wait till the 19th of March 2024, by which time she should have made up her mind whether to grant bail or not.

“We’re also looking forward to hearing. She has directed the prosecution to file their witness statement of oath from the witnesses and serve on us timeously so that we can prepare for our cross-examination.

“So we’re looking forward to a robust 19th of March, you know when they will present whatever they have and then we can also challenge the witnesses with our questions to determine the veracity or otherwise of what they have been said.”

According to earlier reports the court had fixed March 19, 2024, to rule on the bail application.

Kanu’s counsel, Aloy Ejimakor argued that the IPOB leader should be granted bail because of his ill health.

But the prosecuting team led by Adegboyega Awomolo (SAN), who replaced David Kaswe, a lawyer with the Federal Ministry of Justice, urged the court to dismiss the bail application.

Awomolo argued that the Department of State Services (DSS) has the medical facilities required to take care of the IPOB leader.

The judge subsequently adjourned ruling on the bail application to March 19, 2024.

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