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BudgIT faults Osinbajo on FG’s debt profile

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The recent statement by Vice President Yemi Osinbajo that public debt rose by $10billion has been faulted by Budgit,saying the announcement did not carry the true story. 

By critically examining the profile, the organisation said the Osinbajo’s statement was misleading that the entire federation borrowed only N3trillion in three years

The organisation, in a statement, said it was important to deconstruct the Federal Government’s  debt into external and domestic debt to get a full understanding

It explains: “ The total Federal Government’s debt totals the sum of  external debt and domestic debt.

The Debt Management Office (DMO) figures showed that the Federal Government’s external debt alone grew from  $7.34billion in June 2015 to $17.83billion in June 2018, that’s an additional $10.49billion in 3 years.

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Domestic debt of FG as at June 2015 was N8.39 trillion, while it stood at N12.15trillion as at June 2018. That’s another increase of N3.76trillion in three 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 $10billion 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  borrowed $22billion in three years.

But due to naira devaluation gains, total public debt stock (for the entire federation) increased by $10billion, which makes current claims true.

“However, it is important to state that it is true that public debt now $73billiion, grew by $10billion, because Federal Government’s domestic debt in USD terms was $42.63billion in June 2015 and $39.75billion as at June 2018.

“This does not mean that Federal Governmnt borrowed less domestic debt in 3 years. It only goes to show that the domestic debt of FGN grew from N8.39trillion to N12.15trillion from 2015 to 2018 respectively.

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Devaluing exchange rate from N196.95/$ to N305.7/$ made the domestic debt in 2018 relatively smaller in USD terms.

For clearer understanding, let’s use this analogy.

It is like borrowing N1,000 in 2015 which is $5 at N200/$. If you borrow additional N500 at a new exchange rate of N300/$, you now owe N1,500 but you still owe an equivalent of $5.

It can then clearly be shown that the Naira equivalent of the total debt has risen from N12.1trillion to N22.4trillion, a growth of N10.3trillion.

It is important to classify debt into two categories considering that external debt will be paid in USD or other currencies while domestic debt will be settled in Naira. This invariably has consequences for debt servicing costs in the near term.

It is hoped that this “marginal” increase in debt in USD terms does not unleash excessive borrowing by the federation, considering that public revenue in USD equivalent has also severely shrunk.

States’ domestic debt rose from N1.69trillion in June 2015  to N3.477trillion in June 2018. Adjusting this for USD also does not tell the full story. States debt costs are deducted in Naira equivalent at prevailing official rates.

However, devaluation provides adjusted gains especially for monies earned in USD such as oil & gas revenues but losses for those earned in Naira such as CIT & VAT, when converted to USD.

The devaluation of the Naira has impacted directly on the purchasing power of Nigerians, with income severely shrunk in Naira terms while those who export especially in non-oil sector have seen relative gains.

BudgIT believes that acquiring debt is not bad if put to judicious and profitable use for the citizenry ,”but we request more transparency on self-liquidating capital projects that such borrowings are tied to. We believe Nigeria should expand total revenue to at least meet its recurrent costs, in line with the Fiscal Responsibility Act.”

The post BudgIT faults Osinbajo on FG’s debt profile appeared first on The Sun Nigeria.

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CATHOLIC WORLD

Killing of Christians: Buhari lied to Trump – CAN fumes

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Killing of Christians: Buhari lied to Trump - CAN fumes

The Christian Association of Nigeria (CAN) has reacted to President Muhammadu Buhari’s revelation of his conversation with United States President, Donald Trump, on the massacre of Christians in Nigeria, saying President Buhari was economical with the truth.

President Buhari had on Tuesday, revealed that at the heat of the bloody clashes between herdsmen and farmers in Nigeria, the United States President, Donald Trump, unequivocally accused him of killing Christians.

Buhari said these in his closing remarks at the two-day ministerial performance review retreat held at the Presidential Villa, Abuja on Tuesday.

At a point, the President digressed from his prepared speech and narrated his encounter with Trump on the bloody clashes.

He said he managed to explain to the American leader that the clashes were not about ethnicity or religion.

He said, “I believe I was about the only African among the less developed countries the President of United States invited.

“When I was in his office, only myself and himself, only God is my witness, he looked at me in the face, and asked, ‘Why are you killing Christians?’

“I wonder, if you were the person, how you will react. I hope what I was feeling inside did not betray my emotion, so I told him that the problem between the cattle rearers and farmers, I know is older than me not to talk of him. I think I am a couple of years older than him.

“With climate change and population growth and the culture of the cattle rearers, if you have 50 cows and they eat grass, any root, to your water point, then they will follow it. It doesn’t matter whose farm it is.

“The First Republic set of leadership was the most responsible leadership we ever had. I asked the Minister of Agriculture to get a gazette of the early 60s which delineated the cattle route where they used meager resources then to put earth dams, wind mills even sanitary department.

“So, any cattle rearers that allowed his cattle to go to somebody’s farm would be arrested, taken before the court. The farmer would be called to submit his bill and if he couldn’t pay, the cattle would be sold, but subsequent leaders, the VVIPs (very important persons) encroached on the cattle routes. They took over the cattle rearing areas.

“So, I tried and explained to him (Trump) that this has got nothing to do with ethnicity or religion. It is a cultural thing.”

However, CAN’s Vice President and Chairman of the association in Kaduna State, John Hayab, was not impressed with Buhari’s submission, saying “Buhari and his government will never stop from amusing us with their tales by moonlight because what is happening in Zamfara, Sokoto, Katsina, Birnin Gwari, Southern Kaduna, Taraba, Plateau and others cannot be described as a cultural thing.

He told Punch correspondent in an interview: “President Buhari’s weak story about his conversation with President Donald Trump further confirms why his government does not care about the killings in our country by calling them cultural things.

“Just this (Tuesday) evening, I received a report from the Kaduna Baptist Conference President about the number of their members that have been killed by bandits in Kaduna State from January 2020 to date to be 105 and our President will call it a cultural thing? All we can say is may God save our Nigeria.”

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NATIONAL NEWS

CAMA: Bishop blasts Christian lawmakers

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CAMA: Bishop blasts Christian lawmakers

The Catholic Bishop of Nsukka, Most Rev. Godfrey Onah, has blamed Christians in the National Assembly (NASS), for the passage of the 2020 Companies and Allied Matters Bill (CAMA), signed into law by President Muhammadu Buhari recently.

Bishop Onah, said in a remark during the Sunday Mass that if Christians in NASS had opposed the bill, it would not have been passed into law.

President Muhammadu Buhari had on Aug. 7, signed the CAMA bill into law, giving provision for religious bodies and charity organizations to be regulated by the registrar of the Corporate Affairs Commission (CAC), and a supervising minister.

“The question many Christians have been asking is, where were Christian legislators during the debate of this bill and its passage in the National Assembly?

“Because, if they had opposed this bill on the floor of the house, it would not have been passed and sent to the president for assent.

“I blame Christian legislators for doing nothing and allowing the passage of the 2020 CAMA Act,” he said.

“When I say that Christians are too divided and too selfish, don’t forget that the second in command in this country is a Senior Advocate of Nigeria, a professor of Law and a pastor.”

Onah, however, wondered what the Federal Government wanted to achieve in monitoring how the finances of churches in the country are managed when it contributed no dime to the church, NAN reports.

“Government should focus and monitor its ministries, agencies and other government institutions where it budgets billions of Naira annually and not church offerings.

“Had it been that the government gave allocations to churches and decided to monitor its usage, nobody will question the government,” he said.

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NATIONAL NEWS

Nigerians spit fire over fuel, electricity prices hike

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Increasing Fuel and Electricity Prices

Anger and condemnations, across the country, have continued to trail last week’s take off, of new increases in pump price of petroleum products and electricity tariffs, as directed by Federal Government.

Recall that the Petroleum Products Marketing Company (PPMC) official, D.O. Abalaka announced on Wednesday September 3, on behalf of Nigerian National Petroleum Corporation (NNPC) that the new price of petroleum is now N151.56k per litre instead of N149 – N150 per litre which it was previously.

The new electricity tariff which the Nigerian Electricity Regulatory Commission (NERC) tagged “Service Reflective Tariff” has also come into effect. It requires consumers to pay N53.87 – N66.422 per kwh of electricity.

Outraged consumers of fuel and electricity have therefore warned government to get ready for collision with the masses if it fails to rescind these new prices.

Those who have expressed outrage over the new prices regimes include, the Organized Labour, Nigerian Labour Congress (NLC), Nigerian main opposition political party, Peoples Democratic Party (PDP), Nigeria Employers Consultative Association (NECA) and the Major Marketers Association of Nigeria (MOMAN).

Others are: Petroleum Products Retail Outlets Owners Association of Nigeria, the Independent Petroleum Marketers Association of Nigeria (IPMAN) and the Nigerian Association of Chambers of Commerce (NACCIMA).

The NLC said, “The frequent fuel price increase will no longer be accepted. We will not allow Nigerians fall victim of government ineptitude and negligence to make the country self-sufficient in terms of refining petroleum products at home.”

On its part, the PDP has described the price hike as “callous, cruel and punishing” and demanded an immediate reversal to avert a national crisis.

The All Industrial Global sees the incessant increase as a confirmation that deregulation means just price increase.

“This is unacceptable! Under a pandemic, we should put money in the pockets of citizens to revive collapsed livelihoods and preserve lives.” In its reaction, NECA said it has always urged Federal Government to adopt deregulation policy in the oil and gas downstream sector.

The MOMAN in its statement insists that monthly price variation of fuel was no longer sustainable. It urged PPRA to adopt quarterly price mechanism which would save the market the hassles of price volatility. The statements by IPMAN and NACCIMA also followed along the same line that the hike “…serves only to increase the severity and duration of the looming economic recession.”

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