The Nigerian manufacturing sector has reported an expansion for the nineteenth consecutive month in October, latest data from the Central Bank of Nigeria (CBN) have shown.
The Purchasing Managers’ Index (PMI), a barometer of the economic health of manufacturing and services sectors, grew by 0.6 index points to 56.8 index points in October, its fastest pace this year.
According to the data released on Wednesday, of the 14 sub-sectors captured in the survey, 13 reported growth in the review month.
The sub-sectors comprise of electrical equipment; petroleum & coal products; printing & related support activities; cement; chemical & pharmaceutical products; textile, apparel, leather & footwear; and furniture & related products.
Others include transportation equipment; plastics & rubber products; food, beverage & tobacco products; fabricated metal products; nonmetallic mineral products; and paper products.
However, only the primary metal sub-sector recorded a decline in the review month.
The CBN data show that the production level index for the manufacturing sector grew for the twentieth consecutive month in October to 58.9 points from 58.4 points in September.
Similarly, the new orders index grew for the nineteenth consecutive month to 56.8 points, indicating an increase in new orders in the review month.
The manufacturing supplier delivery time index grew faster to 56.4 points, while the sector’s inventories index also grew for the nineteenth consecutive month to 56.2 points, the index grew at a faster rate when compared to its level in the previous month.
In spite of these, the employment level index, which recorded 54.8 points, grew at a weaker pace in October.
The composite PMI for the non-manufacturing sector grew at 57.0 points in October 2018, indicating expansion in the non-manufacturing PMI for the eighteenth consecutive month.
Business activity, new orders, employment, inventory in the non-manufacturing sector all grew at a slower rate, recording 58.3 points, 56.4 points, 55.7 points and 57.6 points in October as against 58.1 points, 55.8 points, 55.4 points and 56.8 points recorded in the preceding month, respectively.
The Ghanaian High Commissioner in Nigeria, Alhaji Rashid Bawa, has clarified the controversy surrounding the closure of 400 Nigerian businesses in Ashanti, Ghana.
Bawa made the clarification while speaking at a programme organised by the Lagos Chamber of Commerce and Industry on Wednesday in Lagos.
The envoy, who was represented by the Minister, Counsellor for Trade and Investment, Sintim Asare, explained that contrary to reports that 400 Nigerian businesses were closed, only 117 were shut in Ghana.
According to him, the businesses were closed because they were not registered, evaded tax, their owners did not have work permits and a large percentage of them dealt in fake drugs.
Bawa noted that the closure of the businesses did not affect only Nigerians but other nationals, including Chinese and Indians.
He said the Ghana Investment Promotion Centre Act, under which the businesses were shut, was meant to protect small businesses in the country by preventing non-Ghanaians from engaging in petty trade, adding that some of the closed businesses have been reopened.
“We are committed to the ECOWAS Treaty and we cannot fight Nigerians, because they are our brothers. Some of the 117 businesses have been reopened.
“For those that are still shut, the owners were given time to regularise their papers and they are doing that, while others have simply shut their shops out of fear of attacks or in solidarity with their brothers who have not opened theirs,” the envoy said.
Reacting, the representatives of various Nigerian businesses in Ghana said the reasons presented by the Ghanaian envoy were not true.
Also speaking, the President of Nigeria Union of Traders Association, Ghana (NUTAG), Chukwuemeka Nnaji, while citing similar occurrence in 2007, said the attacks on Nigerian businesses in Ghana have become a recurring trend.
Nnaji argued that the Act completely eroded the rights of other Economic Community of West African States (ECOWAS) citizens in Ghana, even as Ghanaian citizens continued to enjoy privileges all over West Africa.
Nigeria has ranked fourth among other African nations in the list of Foreign Direct Investment (FDI) Projects to Africa, as the United States, the single largest country investing into the continent, remained confident in the market.
The nation, with a total of 64 FDI projects in 2017, was ranked behind countries like South Africa with 96 FDI projects; Morocco, 96 projects; and Kenya, 67 projects occupying the first, second and third position respectively.
This was contained in the 2018 Africa Attractiveness report released by EY on Monday titled, “Turning tides.” The report provides an analysis of FDI Investment into Africa over the past ten years.
According to the report, the number of FDI projects into Nigeria increased from 51 projects in 2016 to 64 projects in 2017, accounting for 9 percent share of the entire investment into the continent for the review year.
In view of this, the nation rose a step higher from the fifth investment destination in Africa in 2016 to the fourth in 2017.
The report shows that the performance was largely driven by increase in the number of projects invested by U.S. companies into the country, launching 22 projects against 10 in the previous year, just as South African, Chinese and UK investors also increased their FDI activity into Nigeria.
According to the World Bank, Nigeria was among 10 economies globally with the strongest improvement in their business environment last year. The country jumped 24 places on the Ease of Doing Business index.
FDI projects into Africa rebounded from their lowest level in ten years in 2017 as the continent recorded a growth of 6.2 percent to 718 inward investment projects compared with 676 projects recorded in 2016.
The report attributed the growth to interest in “next generation” sectors such as manufacturing, infrastructure and power generation.
“Foreign investors committed to 718 FDI projects in Africa in 2017, a 6% increase from 2016. This brings us back to 2014 levels of FDI projects, but considerably below the 10-year average,” it read.
East Africa emerged Africa’s major FDI hub for the first time as the region recorded 82 percent growth in the number of FDI projects compared with 2016. Countries in the region with the strongest gains include Ethiopia, Kenya and Zimbabwe.
The board of directors of Nigerian Breweries Plc. has recommended an interim dividend of N4.8 billion to its shareholders.
The total dividend translates to 60 kobo per ordinary share of 50 kobo for the period ended September 30, 2018.
In a statement by the company on Monday, the interim dividend, which is subject to the deduction of withholding tax, is payable on Monday, December 10, 2018 to all shareholders registered in the company’s books at the close of business on Thursday, November 22, 2018.
An analysis of the firm’s unaudited and provisional results for the nine-month period ended September 30, 2018, shows that Nigerian Breweries recorded 11 percent drop in sales, indicating a decline in patronage.
Its profit before tax loss was N5.09 billion between July and September this year, while it paid N5.90 billion in the third quarter of 2018 on excise duty expenses up from N4.50 billion in the corresponding period in 2017.
Nigerian Breweries kept a positive profit of N14.76 billion for the nine-month period ended September 2018, this is about 38.4 percent drop from N23.98 billion recorded in the corresponding period in 2017.
Results from operating activities stood at N27.7 billion during the first nine months of the year, representing 34.4 percent decline from N42.3 billion recorded in the same period last year
Despite the positive record for the first nine months, it recorded a loss of N3.66 billion in the third quarter of this year.
The weaker results undermined investors’ sentiment, leading to the depreciation of the stock of Nigerian Breweries on the floor of the Nigerian Stock Exchange (NSE) yesterday, just as it lost 57 basis points to close at N87.50 per share.
Reacting to the results, the Company Secretary/Legal Adviser, Uaboi Agbebaku, explained that the new excise duty on alcoholic beverages and tobacco products introduced in June and the consequent effect of it, adversely impacted the third quarter results.
According to Agbebaku, the company undertook a rightsizing exercise which resulted in a substantial one- off cost during the quarter.
In 2003, the Akwa Ibom State Government of Nigeria began a journey of many miles, a journey that will not only be arduous and expensive but a journey that is promising and prospering if properly sojourned.
The State Government proposed having a deep seaport. It decided to take advantage of the depth Ibaka waters offer- 16.5 meters deep without dredging. But is there a need for a seaport?
Reason for a Seaport
Recent reports show that the seaports currently serving the country, West and Central African sub-region are reaching saturation. In August 2018, Governor Akinwunmi Ambode of Lagos State had to cry out to the Federal Government to ensure that seaports in other parts of the country become functional to decongest and ease gridlock in Lagos State.
Besides, the need for viable alternatives has become critical for major shipping lines sailing the West African coastlines. With limited land to expand the existing seaports in Lagos and the inhibiting conditions against the development or expansion of other ports, the proposed Ibom Deep Seaport offers an ultra-modern deep seaport with modern cargo handling equipment, facilities and systems that can address the capacity challenges constraining other seaports across the region. The greenfield site has substantial land available for future expansion.
Due to its proximity to target markets in West and Central Africa, neighbouring hinterland countries and major shipping lines calling West/Central Africa, large gateway market size to attract direct vessel services and sizeable transhipment cargo hinterland for feeder shipping network connection, as well as its capacity to handle post and New Panamax vessels at its specialized terminals, the IDSP is in an enviable position to emerge as the first major transhipment hub for the region.
According to Maritime experts, the transhipment container market for the IDSP is estimated to grow from about 1.2 million TEUs in 2021 to about 4 million TEUs in 2040. Immense potentials you may say! But what gives the seaport this vast potential you may wonder.
Features of the Ibom Deep Seaport
Strategically located in the South East of Akwa Ibom State, Nigeria (a leading oil and gas producing state in Nigeria), the approximate coordinates of the IDSP scaled from the British Admiralty Chart No. 1387 are Latitude 4° 32’ 35’’ N; Longitude 8° 14’ 7’’ E and UTM coordinates 415168 m E; 502,199 m N (UTM Zone 32N). According to the project official website, the 2,565 hectares greenfield port area is designed for New Panamax Class vessels with channel (18.24m); turning basin and berth depth (16.72m) and quay length of about 7.5 km. When fully developed, the container terminals will be able to accommodate up to 13 New Panamax Class container vessels and two very large feeder vessels. With immense business potentials that abound, giving the project the attention it requires for its realization would be seen as a wise course of action.
Since its conceptualization, contributions have been made by successive administration towards its realization. Obong Victor Attah's administration designed the seaport. Out of 10 million US Dollars, his administration paid 5 million US Dollars for its designed and had negotiations with São Tomé for the development of Industrial City for the Seaport.
The Akpabio's administration took it up from there. He said he acquired 14, 900 hectares of land for the take-off of the Seaport. Just weeks before the end of his tenure, Akpabio obtained approval from the Federal Executive Council for the commencement of the project. Discerning that time was against him, and that the task for the realization of the project will be in the hands of his successor, Governor Udom Emmanuel, he assured that his successor has the capacity to handle the task.
While commissioning a drainage system in Uyo on 19th May 2015, Governor Akpabio said " As we have commissioned numerous projects today, by the Grace of God we will start the Ibom deep seaport so that Akwa Ibom will be taken to the rest of the world and I am assuring you today that Udom Emmanuel will perform creditably well to make us realize this project and others about to come". Will his successor, Governor Emmanuel live up to expectations?
Governor Emmanuel in the Dock
Just like Biblical Joshua who was given the weighty responsibility of taking the Israelites into the promised land, Governor Emmanuel perhaps understood the expectations ahead of him.
Taking cognizance of the economic benefits the Ibom Deep Seaport Project will have on the people of the state and the country in general, as he took over the administration of the State, Governor Udom Emmanuel put in place motions towards the realization of the project.
14 days into his administration, the Governor inaugurated the first committee of his administration, the Technical Committee for the Actualization of Ibom Deep Seaport Project thus offering clear indication that this is the flagship project for his administration. The Governor ensured that the 10- Man Committee is imbued with men of experience especially as the committee was headed by Barr. Mfon Usoro, a one-time Director-General of Nigeria Maritime Administration and Safety Agency (NIMASA). Results were expected.
Six months into office, in November 2015, during a media chat, the State Governor assured that before 2018 runs out, the State should be able to have a deep seaport. Intensive work began. However, a State cannot develop a seaport alone. Seaport development is in the Exclusive List.
The State Governor then had the herculean task of convincing the Federal government on the need to invest in the project. At every opportunity, Governor Emmanuel became enmeshed in preaching the gospel on the gains the Federal Government could have if they invest in the project.
In one of those moments, the result of his gospel bore fruits. While addressing a Town hall meeting of the government and people of the State on Thursday, 2nd March 2017, the Acting President, Prof. Yemi Osinbajo, announced that Federal Government was fully committed to the Ibom Deep Seaport Project and has made provision of N1 billion in Nigeria Port Authority 2017 budget for the development of the project. He added "This is a project Federal Government is taking seriously". The assurance served as the icing on the cake. It signaled the birth of the long awaited partnership. How did the Udom Emmanuel's administration embrace this development?
The current Transaction Advisers, Global Maritime and Port Services (GMAPS) of Singapore had commenced work on the procurement stage.
On 24th of December 2017, the procurement Process for the Seaport development was approved by Ministerial Project Development Steering Committee ( MPDSC). On the 8th of January 2018, the Request for Qualification (RFQ) from interested investors was published.
According to the Akwa Ibom State Commissioner for Housing and Special Duties, Mr Akan Okon, this was done through a virtual data room.
The Commissioner says that at the end of the exercise, 174 downloads of the RFQ were received. Out of that 174, he explains that only 40 bidders registered that they will submit their RFQ but at the end of the day, only eight were able to submit their RFQ.
Okon says that based on the submission, on the 20th of March, 2018, that RFQ was opened and evaluation done by MPDSC. He offered insight to the fact that at the end of the evaluation, three of the companies were pre-qualified, meaning that they met the requirement that was published. The three international firms who met the requirements are the consortium of Bollore and Power China, China Road Breach Corporation, CRBC and China Harbour Engineering Company of Nigeria. You may wonder then, at what level does this development keep the project?
The Commissioner explains " At this stage, we have been able to come up with the preferred bidder and the reserved bidder for the project and as soon as this is approved, the full business case will be sent to the Federal Executive Council for further approval. I can assure you that as soon as that is done, the construction of the project will commence.”
Elucidating further, Okon states “The Federal Government through the Federal Ministry of Transport set up Ministerial Project Development Steering Committee (MPDSC) which is made up of representatives from the same Ministry, the Nigeria Port Authority (NPA), ICRC, the programme Manager, representatives of ICPC and EFCC, members of the Technical Committee and Akwa Ibom State Government. Every process leading to where we are now is being approved by the Federal Ministry of Transportation."
He adds that before the end of the year, they should come to the end of the entire transaction since everyone involved in the project was showing great commitment.
Interestingly, the Commissioner announces that with the level reached with the project and government's timetable, by the end of November 2018, the groundbreaking of the project should take place. But is the Federal government also ready for its commencement? In his recent visit to Akwa Ibom State Government House, after the bid conference of the project, the Chairman, Project Development Steering Committee and Director, Maritime Services, Federal Ministry of Transportation, Sani Umar Galadanchi said the Minister of Transportation has passion for the project and promised to continue to work with the state Technical Committee and other stakeholders to achieve result.
He added, " this project is not just for Akwa Ibom State, it is for the country and Africa in general. I wish to inform you that we have been working in a way that by God's grace, the project may commence sooner than later."
Nevertheless, for such magnitude of project to thrive when it commence, there must be certain supportive imperatives put in place by the State government. Has provision been made for them?
In June 2018, while brainstorming with stakeholders and Investors at Government House, Uyo over the realization of the project, the State Executive noted that the State Government had met with the communities and fulfill all their obligations.
On road infrastructure, work has began on 55.1km,12 Lane Superhighway leading to Ibom Deep Seaport.
This is a carriageway which starts from Esit Urua in Eket/ Ukpenekan Junction in Ibeno , criss -crosses Esit Eket, Mbo and ends at East west road in Oron Metropolis with a Fly-Over that empties into Uyo-Oron Daulized Road .
The project is a State government project undertaken by the Udom Emmanuel's administration under the Alternative Project Funding Approach. It is prosecuted by Elba construction firm. According to the Akwa Ibom State Commissioner for Works, Akparawa Ephraim Inyang, the project is specially designed to serve the seaport, taking cognizance of its durability to withstand heavy duty trucks.
The Chairman of the Committee for the realization of the Ibom Deep seaport, Barr Mfon Usoro adds that in collaboration with the Federal government, the State is vested with the task of developing 2565 hectares for the project. She says the State Government has acquired a license for a free trade zone which is part of the building blocks for an industrial city. She explains that the industrial city will have features like agriculture, oil and gas, petrochemicals, marine-related industries, auto assembly plants, power plants, as well as real estate developments.
Barr Usoro mentions that plans are in motion by the Udom Emmanuel's administration to relocate residents around the site of this project to a more comfortable location as the project is set to begin in full scale.
Assessing contributions made towards the project, an indigene of Mbo, the host community of the project, Dr Emmanuel Ekuwem who also serve the State as the Secretary to the Akwa Ibom State government notes that the strides attained by the Udom Emmanuel's administration towards the realization of the project has been plausible.
In his remark recently in his office in Uyo when he played host to the people of his community, under the aegis of Uda Community Development Union, Ekuwem added “His Excellency, the Governor has spent Millions of Dollars on the Ibom Deep Seaport. It is a fact. There are seven steps to this seaport. We are now on step seven which is the last step."
Also bearing her mind on the project, the Technical Committee Chairman for the Realization of the Project, Barr Mfon Usoro says past leaders of the State deserve commendations for the initiative and contributions they have made towards the project. She adds that Governor Udom Emmanuel has lived up to expectation evidenced in the strides he has achieved in the project within his three years in office. The Chairman further points out that the Udom Emmanuel's administration is also deserving of commendation over his commitment, strategic push and go-getting spirit, a gesture she insist is responsible for the critical milestone attained in the implementation of the Ibom Deep Seaport (IDSP) project.
Following expected shortfall in Nigeria's independent revenue and recoveries, fiscal deficit in the 2018 budget is likely to widen by about 132 percent, according to a report by Afrinvest West Africa.
This implies the nation may have to increase its borrowing to meet up some of its spending obligations for the 2018 fiscal year, even as concerns over the nation’s rising debt profile heightened.
Data from the Debt Management Office reveals that Nigeria’s external debt profile rose by 114 percent from N10.32 trillion in June 30, 2015 to N22.08 trillion as of June 30, 2018.
In the ‘Nigerian Banking Sector Report’ by the Lagos-based investment banking firm, which was launched on Monday in Abuja, government’s independent revenue and recoveries, accounting for 40.5 percent of total projected revenues in the 2018 budget was predicted to underperform by 40 percent.
The company said the projection, which was premised on political distractions caused by election campaigns ahead of the 2019 polls, might widen fiscal deficit up to 3.5 percent of nominal Gross Domestic Product (GDP.
On June 20, President Muhammadu Buhari signed the 2018 Appropriation Act into law. The budget with an estimate of N9.12 trillion has N2.87 trillion allocated for capital expenditure and N3.51 trillion for recurrent (non-debt) expenditure.
A breakdown of the budget shows that a total of N2.01 trillion was estimated to be spent on debt servicing, deficit was put at N1.95 trillion, while statutory transfer and sinking fund were allocated N530 billion and N190 billion, respectively.
The budget was expected to be funded by N2.99 trillion to be generated from oil revenue and N31.25 billion from Nigeria Liquefied Natural Gas (NLNG) dividend.
Revenue from minerals and mining was projected at N1.17 billion; N1.25 trillion from non-oil revenue of which N658.55 billion will be generated from Companies Income Tax (CIT); N207.51 billion from Value Added Tax (VAT); N324.86 from the Nigerian Customs Service (NCS), while N57.87 billion was expected to come from Federation Account levies.
Furthermore, the government projected N847.95 billion from independent revenue, while N374 billion was expected from domestic recoveries, assets and fines, and N138.44 billion from other federal government recoveries.
Tax amnesty income was put at N87.84 billion; unspent balance in previous fiscal year, N250 billion, and signature bonus was to generate and N114.30 billion.
But according to the report, while the revenue projection from oil was achievable owing to increased oil prices in the internationals market, that of independent revenue and recoveries remained undoubtful.
“The Federal Government plans to generate 41.6 percent of its revenues from oil and the remainder from taxes, independent revenue and recoveries, which account for 40.5 percent of total projected revenues and have historically underperformed.
“Given these considerations as well as political distractions, we estimate a significant underperformance in revenues by 40 percent.
“Hence, we estimate the fiscal deficit to expand to N4.4 trillion above budget estimate of N1.9 trillion, representing 3.5 percent of nominal GDP, well above the three percent threshold prescribed by the Fiscal Responsibility Act,” the report read in part.
As part of its economic diversification drive, the federal government of Nigeria on Monday said it has issued the first gold refining license in the country.
Speaking at the ongoing 24th Nigerian Economic Summit (NES) in Abuja, the Minister of Budget and National Planning, Senator Udo Udoma, said the development was one of the outcomes of Economic Recovery and Growth Plan (ERGP) Focus Labs.
Udoma said the government issued the license to Kian Smith Limited, adding that the ERGP plan has achieved its objective as it was conceived primarily to get the nation’s economy out of recession.
“As an outcome of the ERGP Focus Labs, we have also been able to accelerate the development of the National Gold Development Policy and the establishment of a Federal Gold Reserve Scheme in Nigeria.
“Today, I am happy to report that the first gold refining licence has been issued to a company called Kian Smith Limited, which was one of the companies that participated in the labs.
“Indeed, the Federal Government is finalising modalities to purchase gold from local refineries via a Federal Gold Reserve Scheme subject to international standards ,such as the London Bullion Market Association,” the minister said.
He added that a local automobile assembly in Imo State, Autodex Limited, was being supported to double its capacity for the production of farm tractors.
The NES is an annual event that brings together chief executives/top level operators from the private sector and very senior Government officials to discuss how best to develop the Nigerian economy and monitor the progress that is being made.
The main focus of the summit is the short to medium term policy direction while giving priority to the national interest in the context of the evolving global economy.
This year’s edition was themed “Poverty to Prosperity”, it commenced yesterday (Monday) and it is expected to end today (Tuesday), October 23, 2018.
Pension Fund Administrators (PFAs) have invested a total sum of about N4.22 trillion in Federal Government of Nigeria Bonds in August.
Data obtained from the National Pension Commission (PenCom) on Sunday revealed that the amount represents 50.63 percent of the total pension assets of N8.33 trillion in the review month.
Besides, N1.48 trillion was invested in Treasury Bills, while Federal Mortgage Bank of Nigeria (FMBN), Sukuk and Green Bonds got N10.91 billion, N53.15 billion and N6.95 billion, respectively.
This brings the total investment in Federal Government’s securities by the PFAs to N5.78 trillion as at August, representing 69.30 percent of the total pension assets.
State governments borrowed a total of N154.43 billion from the pension funds through issuance of securities. N400.45 billion was invested in corporate bonds, banks had N849.09 billion while corporate infrastructure bonds took N7.33 billion.
Others include commercial papers with a total investment of N116.76 billion; real estate properties, N226.64 billion; and supra-national bonds, N6.67 billion.
Mutual funds got N21.29 billion as open and close end funds and reits took N12.18 billion and N9.10 billion, respectively. Private equity fund, N38.57 billion; infrastructure fund, N16.07 billion; cash and other assets, N24.56 billion.
Furthermore, the pension assets were reclassified according to new structures of Retirement Savings Account (RSA) Fund I, II, III, and IV.
RSA Fund I recorded N4.55 billion; RSA Fund II, N3.69 trillion; RSA Fund III, N1.96 trillion and RSA Fund IV, N619.05 billion.
Also, Closed Pension Fund Administrators (CPFAs) Fund stood at N1.08 trillion while Existing Schemes (ES) was N957.50 billion.
Following concerns over the nation’s rising debt profile and dwindling revenue, the Federal Government of Nigeria said it was planning to reduce its fiscal plan for the first time since the return of democracy in 1999.
This, according to the government, was to ensure prudence, reduce deficit financing and borrowing, even as it vowed to deploy strategies to improve the nation’s revenue so as to reduce the country’s debt service to revenue ratio which is currently at 62 percent.
To achieve this, a budget size of N8.65 trillion is being proposed for the 2019 fiscal year, indicating about N470 billion reduction from N9.12 trillion budgeted for the 2018 fiscal year.
The Minister of Budget and National Planning, Sen. Udoma Udo Udoma, made the disclosure at a public consultation on the 2019 – 2021 Medium Term Fiscal Framework (MTEF) and Fiscal Strategy Paper (FSP) on Thursday in Abuja.
Udoma revealed that deficit in the 2019 budget would be cut from N1.9 trillion in 2018 to N1.6 trillion, noting that the key assumptions for the 2019 proposed fiscal plan include an oil production volume of 2.3 million barrels per day (mbpd), $60 per barrel of oil benchmark and an exchange rate of N305 per dollar
He said Inflation rate was put at 9.98 percent, while Gross Domestic Product (GDP) growth rate was reviewed downward to 3.01 percent from 3.5 percent earlier projected in the Economic Recovery and Growth Plan (ERGP).
Udoma added that N3.6 trillion oil revenue was being targeted as against N2.9 trillion for the current fiscal year, while N1.385 trillion is projected as non-oil revenue as against N1.348 trillion in the 2018 budget.
The Federal Government said nine government-owned enterprises, excluding the Nigerian National Petroleum Corporation (NNPC), is expected to generate the sum of N955.3 billion, while a sum of N624.5 billion was being expected from independent revenue sources, down from about N847 billion in 2018.
Udoma said for the government expenditure, a sum of N506.8 billion is projected for statutory transfer against N530.4 billion in 2018; debt service of N2.144 trillion in contrast to N2.013 trillion in 2018; and sinking fund of N220 billion, against N190 billion in 2018.
According to him, up to August 2018, the 2018 revenues was N2.48 trillion, while the full year 2017 revenue was N2.6 trillion. The minister added that the overall 2018 revenues current run-rate is 30 percent higher than that of 2017.
“2018 revenues up to August 2018 was N2.48tn, while the full year 2017 revenue was N2.6tn. Overall, 2018 revenues current run-rate is 30 per cent higher than last year’s. This is the reason we have cut the size of the budget from N9.12 trillion to N8.65 trillion.
“In 2019, we will concentrate on getting more revenue, oil and non-oil, by squeezing the maximum from oil, and build up non-oil revenue by an average of 30 percent up from the previous figure,’ he said.
Explaining the rationale behind the nation’s ballooned debt profile, Udoma said the borrowing was critical as the country needed funds to bring it out of recession, “that borrowing was directed at capital projects and it worked. That is why you see activities on Lagos-Ibadan rail line and others.”
The Federal Government of Nigeria has admitted that Nigeria is in debt distress as pointed out by the International Monetary Fund (IMF) on Thursday.
The Director of African Department at the IMF, Abebe Selassie, while addressing participants at a special session on African development at the on-going 2018 IMF/ World Bank Group Meetings in Bali, Indonesia, had categorised eight African countries as being in debt distress over rising foreign debt.
Selassie had stressed the need for African nations to constantly monitor their debts and make external borrowing sustainable.
He however did not mention the name of the affected countries, he simply described most of the oil exporting countries in Africa as being engrossed in the ensuing burden.
Africa’s oil producing countries in order of production capacity are, Nigeria, Angola, Algeria, Egypt, Libya, Congo, South Sudan, Chad, Cameroon, Ghana, among others.
The Minister of Budget and National Planning, Sen. Udo Udoma, who spoke at the presentation of the IMF Regional Economic Outlook Report for Sub-Sahara Africa at the ongoing event on Thursday, agreed with IMF’s position and said Nigeria’s debt vulnerabilities was an issue that should be adequately monitored.
A statement by his Special Adviser on Media, Akpandem James, quoted him as saying, “Even though we in Nigeria have one of the lowest debt levels among our African peers, we realise that we need to improve our revenues to bring down our debt service to revenue ratio to more comfortable levels.”
Udoma noted that the Federal Government was deploying some measures for domestic revenue mobilisation and maintaining fiscal discipline, adding that its tax reform policy such as the tax amnesty programme has helped in broadening the nation’s tax base.
“This, among, other measures, has resulted in the number of taxpayers rising from 13 million to over 19 million. We are also deploying technology in tax and customs’ collections to automate processes and enhance efficiencies.
“Our external debt is primarily concessional borrowing, representing 54 per cent of our external debt as of June 2018. The Debt Sustainability Analysis is conducted annually to reaffirm that our public debt stock is sustainable. In Nigeria, our borrowing is being utilised principally to fix our infrastructure,” Udoma said.