Economic indicators portend challenging times for Nigerian businesses
Zainab Ahmed

Minister of Finance, Budget and National Planning, Zainab Ahmed, says the Federal Government has thus far disbursed N1.98trn as a share of the 13 per cent oil derivation backlog paid to oil-producing states.

Ahmed made the disclosure at the sixth edition of the President Muhammadu Buhari administration scorecard (2015-2023) in Abuja on Thursday.

The 13 per cent derivation fund recently resurfaced after Governor Nyesom Wike of Rivers State alleged that the oil-producing states have refused to disclose their share of the derivation arrears paid by the Federal Government from 1999 to all the Niger Delta states.

However, according to Ahmed, the amount was paid in seven years, despite some of the funds preceding the current administration.

She said, “One of the key functions of the Ministry of Finance Budget and National Planning is to support the states. We wouldn’t have been able to grow consistently without enabling the states to grow because it is a federation.

“Mr. President has been very uniquely generous in his support to states. I can say no president has provided the level of support provided to the states of the Federation. He understands that the federating units need to work together as one to achieve the targets that he has set for the country. So everybody goes to support sub-national governments. In seven years, we have disbursed N1.98trn in funds to oil-producing states.”

On the financial health of the country, Ahmed insisted that Nigeria was not broke.

Her comment comes amid criticism of the Buhari administration for copious borrowings believed to have sapped the country’s coffers dry.

Data obtained from CBN’s website showed that the federal government’s debt through Ways and Means climbed from N17.5trn in December 2021 to N23.8trn in October 2022 —an increase of N6.3trn in 10 months.

These borrowings are currently not included in the country’s total public debt stock (federal and state governments) which currently stands at N42.84trn.

In July, the cost of servicing debt surpassed the federal government’s retained revenue by N310bn in the first four months of 2022.

Ahmed disclosed this while presenting the 2022 fiscal performance report for the period, saying that the Federal Government’s total revenue was N1.63trn, while debt service gulped N1.94trn.

She advised that urgent action was required to address “revenue underperformance and expenditure efficiency at national and sub-national levels”.

Similarly, the President of the African Development Bank (AfDB), Akinwumi Adesina, in his analysis of Nigeria’s debt profile, said the external debt levels stand at N16.61trn or $40bn.

He concluded that “Nigeria needs help to tackle this debt burden”.

But during her presentation of Buhari’s scorecard on Thursday, Ahmed said Nigeria has not in any way defaulted in its both domestic and foreign debt repayments, adding that the country is not opting for debt relief.

The minister noted that the country continues to disburse funds to the three tiers of government from the Federation Accounts Allocation Committee (FAAC).

She said the Federal Government has since 2015 disbursed N5.04trn to state governments, disclosing that the non-oil sector drives the country’s economy more than the oil sector owing to vandalism of infrastructure.

Ahmed further said oil production is increasing, stressing that as of October 2022, it soared to 1.4 million barrels per day.

According to her, N1.7trn was released for this year’s capital projects as of September 2022


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