…As Finance experts contradict FG over increase in debt stock***
The $12 billion Dangote refinery will transform and diversify Nigeria’s economy when completed in 2019.
Speaking at the on-going Oil Trading and Logistics (OTL) conference in Lagos, yesterday, Mr. Devakumar Edwin, Executive Director, Dangote Group said that the 650,000 barrel per day refinery will stimulate economic development in Nigeria. Edwin, who was represented by the Director, Business Strategy and Optimisation, Dangote Refinery, Mr. Srinivas Rachakonda described the refinery as one of the most strategic socio-economic projects in Nigeria.
He said that the refinery was designed to process a variety of light and medium grades of crude and produce extremely clean fuels that meet Euro V specification. The Dangote boss said that usually, the sulphur in petroleum fuels results in vehicle exhaust emissions that have negative impact on health and environment, adding that the Dangote plant has invested in most advanced technology to produce Euro V fuel due to help Nigeria meet the European Standard of gasoline.
Rachakonda said that the project will provide thousands of direct and indirect jobs and add value to the Nigeria’s economic development, noting that the refinery will lead to significant skills transfer and technology acquisition opportunities in the country. Also speaking, the former Executive Secretary, Petroleum Product Pricing Regulatory Agency (PPPRA), Mr. Reginald Stanley, said Dangote Refinery is going to be a game changer for the entire African downstream industry.
Stanley said that the refinery would attract global attention and market when completed, adding that the initiative has raised hope for other African countries on the viability of investing in a huge refinery. He said the refinery would open a sub-regional market with a West African price index for countries in the sub-region, stating that when the refinery becomes operational, Nigeria’s petroleum products import would stop or reduce drastically. Chairman, OTL Africa Downstream, Mr. Emeka Akabogu, said recent market tendencies have shown appetite for some categories of investment in the downstream value chain.
Akabogu noted that there have been considerable investments in retail outlets development, marine logistics platforms and storage facilities across the country. Akabogu stated: “This year’s event will further empower African oil and gas companies to harness the economic potential of the downstream sector in areas ranging from crude oil value addition to refining, to development of critical supply infrastructure across African States.”
In the meantime, a fresh controversy may have emerged over the true state of borrowings and indebtedness of the Nigerian government since inception of President Buhari’s regime in 2015 with BudgIT Foundation contradicting the Vice President, Prof. Yemi Osinbajo on actual figures.
Contrary to Osinbajo’s position that the government has borrowed only $10 billion in the past three years, BudgIT, a fiscal policy monitor house, has given a breakdown that indicated that actual borrowings in the past three years is about $22 billion. Vice President Yemi Osinbajo has said the Buhari-led administration inherited a debt of $63 billion and has only borrowed $10 billion since it took office in 2015.
Speaking at the 9th Public Lecture of Sigma Club at the International Conference Centre, University of Ibadan, last weekend, Osinbajo stated: “In 2010, our debt was $35 billion, $41 billion in 2011, $48 billion in 2012, $64 billion in 2013, $67.7 billion in 2014, $63.8 billion in 2015, $57.8 billion in 2016, $70 billion in 2017 and $73 billion in 2018” “The nation’s debt as at today is $73 billion, an increment of $10 billion from the $63 billion inherited in 2015.”
However, in a statement yesterday by Niyi Soleye, Human Resources Manager, BudgIT, the organisation noted that while the external debt rose by $10.49 billion from $7.34 billion in June 2015 to $17.83 billion in June 2018, domestic debt increased by N3.76 trillion from N8.39 trillion to N12.15trillion within the same period, amounting to about $12 billion at an exchange rate of N305/$.
BudgIT stated further: “It is important to deconstruct the Federal Government 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 $7.34 billion in June 2015 to $17.83 billion in June 2018, that’s an additional $10.49 billion in 3 years.
“Domestic debt of FG as at June 2015 was N8.39 trillion while it stood at N12.15 trillion as at June 2018. That’s another increase of N3.76 trillion in 3 years. At an exchange rate of N305/$, that’s $12 billion. This means the total increase in external and domestic debt is $22 billion. “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 $10 billion 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 $22 billion in three years but due to naira devaluation gains total public debt stock (for the entire Federation) increased by $10 billion, which makes current claims true.
“However, it is important to state that it is true that public debt is now $73 billion, grew by $10 billion, because FG domestic debt in USD terms was $42.63 billion in June 2015 and $39.75 billion as at June 2018.
Vanguard