…As Nigeria spends N5.468tr on debt servicing in 39 months***
Over two years after they were recommended for probe, the Federal Government has yet to investigate and charge the National Security Adviser, Major General Babagana Monguno; and the Minister of Interior, Lt. Gen. Abdulrahman Dambazau (retd.).
The two ex-generals were recommended for probe by the Committee on Audit of Defence Equipment Procurement in the Nigerian Armed Forces from 2007 to 2015.
Moguno was recommended for probe over the procurement of weapons during his time as the Chief of Defence Intelligence Agency from July 2009 to September 2011 while Dambazau was recommended for investigation following alleged suspicious contracts awarded when he was Chief of Army Staff from 2008 to 2010.
The fourth interim report of the committee which was signed by the President of the committee, Air Vice Marshal John Ode (retd.), recommended the investigation of 25 former officials of the Ministry of Defence, 16 retired generals and 44 companies.
The report read in part, “The sum of $5, 152, 792.44 equivalent to N772, 918, 866.60 at N150 per dollar was also transferred to unknown offshore accounts for unspecified purposes.
“The account was closed on December 1, 2011 with a closing balance of $0.0. Lt.Gen AB Dambazau (retd.) and Maj.Gen Charles Airhiavbere should be further investigated for the operation of the account.”
Some others named in the report include a former Chief of Naval Staff, Vice Admiral Dele Ezeoba (retd.), and a former Chief of Army Staff, Lt.Gen Onyeabor Ihejirika (retd.).
While Ezeoba has been taken to court by the Economic and Financial Crimes Commission and made to return N1.8bn, Ihejrikia’s properties worth billions of naira have been seized by the government.
In the meantime, servicing of domestic and foreign debt gulped a total of N5.468trillion between July 2015 and September 2018, an analysis of the data obtained from the Debt Management Office (DMO) has shown.
While domestic debt servicing gulped a total of N4.77tn within the period, the country spent a total of $2.28bn to service foreign debt.
Statistics made available by the DMO showed that the cost of servicing the nation’s debt has been on the rise as a result of the increasing size of the debt as well as the increasing cost of debt servicing.
In 2015, the country spent a total of N1.02bn on servicing domestic debt. Out of this amount, N528.54bn was spent in the first half of the year while a total of N489.59bn was spent in the second part of the year.
From January to December 2016, the country spent a total of N1.23tn on domestic debt servicing. Again in 2017, the cost of servicing domestic debt rose to N1.48tn.
Although the DMO has yet to release the cost of debt servicing for the fourth quarter of 2018, statistics show that the cost of servicing local debt for the first three quarters stood at N1.57tn.
In the first quarter of 2018, domestic debt servicing gulped N643.63bn. In the second quarter of the year, N297.37bn was spent while a total of N633.58bn was spent in the third quarter of the year.
On the other hand, external debt servicing gulped a total of $2.28bn in the period of 39 months.
The nation spent a total of $331.06m on external debt servicing in 2015. While $159.31m was spent in the first half of the year, a total of $171.75m was spent in the second half of the year.
From January to December 2016, a total of $353.09m was spent on external debt servicing. This went up to $464.05m between January and December 2017.
Again, the cost of debt servicing in the fourth quarter of 2018 is not yet available.
However, available statistics showed that the nation spent a total of $225.25m in the first quarter of 2018 and a total of $202.37m in the second quarter of 2018. In the third quarter of the year, it spent a total of $849.97m on external debt servicing.
This means that for the first three quarters of 2018, the nation spent a total of $1.28bn. This is understandable, given the recent increase in the external debt commitment of the nation as a result of a strategy by the government to borrow more from external sources in order to decrease the ratio of domestic debt.
A number of economic actors including the International Monetary Fund had said that debt servicing had been gulping a large percentage of the country’s revenue.
The IMF had, for instance, in November 2018 said that Nigeria was spending more than 50 per cent of its revenues on servicing of debts.
Speaking at the presentation of the Regional Economic Outlook for Sub-Saharan Africa – Capital Flows and the Future of Work in Abuja on November 8, 2018, the Senior Resident Representative and Mission Chief for Nigeria, African Department, Amine Mati, said Nigeria’s expenditure on debt servicing was high compared to its income.
Mati said that although Nigeria’s debt to Gross Domestic Product remained low at between 20 and 25 per cent, the country spent a high proportion of its revenue on debt servicing as a result of low revenue generation.
He added that the debt servicing to revenue ratio was more than 50 per cent while for sub-Saharan Africa, the rate is about 10 per cent; a figure he said was too high and reminiscent of what the region went through in the period following debt relief at the beginning of the 21st century.
Punch with additional report from The Citizen