The Nigeria Extractive Industries Transparency
Initiative, NEITI, Sunday, expressed concern over Nigeria’s
level of indebtedness, declaring that Nigeria’s debt in
relation to revenues appears to have reached critical levels.
NEITI, in its latest Quarterly Review, which focused on
disbursement from the Federation Accounts and Allocation
Committee, FAAC, disclosed that a total of N513 billion
was spent on debt servicing by the three tiers in the first
quarter of 2017, compared to total disbursements of
N1.276 trillion.
It said: “This means that debt servicing took up 40.27 per
cent of FAAC disbursement for the first quarter of this year.
“The figure reveals that debt servicing as proportion of total
FAAC allocations is generally higher in the first quarter of
the year, after which it falls to lower levels.
“Based on this, the figure of 40.27 percent observed in the
first quarter of 2017 might be an upper threshold and it
would thus be expected that this figure will be lower for the
remaining quarters of the year.”
However, the report noted that the Debt Management
Office, DMO, is yet to provide data on the figure for the
second quarter of 2017.
It added that domestic debt servicing constituted 90 per
cent of total debt servicing, explaining that domestic debt
servicing consistently outstripped external debt servicing.
According to the NEITI report, in the first quarter of 2015,
domestic debt servicing made up over 93 per cent of total
debt servicing, while the figure did not change much by the
first quarter of 2017 as domestic debt servicing was over 92
per cent of total debt servicing.
Also, the report stated that N760.18 billion was released by
the Federal Government to the 36 states and the Federal
Capital Territory, Abuja, paid in two tranches.
According to NEITI, the money represents refunds of over
deductions from FAAC allocations to states and local
governments used for quick payment of debt relief granted
to Nigeria by the Paris Club between 1995 and 2002.
The report disclosed that Rivers received the highest
amount of N44.93 billion followed by Delta with
N37.61billion and Akwa Ibom N35.98 billion, while Bayelsa
got N34.9 billion and Kano state received N31.74 billion
respectively.
It added that the Federal Capital Territory, Abuja received
the lowest amount of N2.05 billion.
NEITI further acknowledged the fact that the Nigerian
National Petroleum Corporation, NNPC, had completed the
refund of N450 billion owed the Federation Account, as a
result of portions of domestic crude receipts withheld by
the Corporation from November 2004.
It noted that this followed the implementation of a payment
schedule worked out between the Corporation and the
Federation Allocation Accounts Committee.
It said: “From the NNPC debt refund which commenced
since 2011, a total of N206.242 billion was paid to the
Federal Government, N151.446 billion to the 36 states and
FCT, while the 774 local governments collectively received
N92.311 billion.”
Furthermore, NEITI disclosed that the three tiers of
government, including federal, states and local
governments, shared N2.788 trillion between January and
June this year, a 38 per cent increase on the N2.019 trillion
shared in the first half of 2016.
Out of $2.788 trillion disbursed in the first half of 2017, it
said the Federal Government received N1.09 trillion, 36
state governments received N923 billion, while N549.8
billion went to 774 local governments in the country.
“ A further breakdown shows that total releases to the
three tiers of government was N430.16 billion in January;
N514 billion in February; N496.40 billion in March; N418.82
billion in April; N418.82 billion in May; and N462.36 billion
in June,” NEITI stated.
It said the review was based on data obtained by NEITI at
the meetings of FAAC and data from National Bureau of
Statistics, Office of the Accountant General of the
Federation, Federal Ministry of Finance and the Debt
Management Office.
It added that its interest in providing timely information and
data on the FAAC allocations to the three tiers of
government was in line with its mandate to monitor and
enthrone transparency in the management of extractive
industry revenues.
“NEITI’s is also interested in the FAAC disbursements in
view of the fact that over 70 per cent of the funds involved
are derived from the extractive sector,” it argued.
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