₦airaland Forum

adexsimply:
Well, lemme pretend like I understand the accounting jargon

JingoOAU:
Thanks to my ancestors that Jonathan never got re-elected, our great grand children's future would have been affected

It still baffle me up till now for some elements who are sympathiser of GEJ to believe the man is a saint, role model and corruption free...I am very sure they knw within themselves that GEJ reeks corruption, but they dare not say it out...isn't that cowardice?

Their belated line of answer has always been that corruption or stealing never start with GEJ administration and if we have to talk of stealing, we should also talk of OBJ....very awful and incongruous statement

Even if your children's children future are being mortgaged, what matters to you lots is asslicking

In future, your children will all curse you for remaining silent and letting their future to go bleak

Meiji:
What do you have to say about the debt of the Lagos State government?

dekdek:

There is nothing wrong with debts perse especially if it's put in good use. It's quite evident even to the biggest critic what is being done in lagos even with the debt. Can we say the same about this cursed govt. Infact these fools even borrow money to pay salaries. Does lagos do that also? Please it's incomparable.

Meiji:
What do you have to say about the debt of the Lagos State government?

bebe2:
I have a small business.

And I have no debt

Bevista:
Strictly speaking, the problem is not the debt per se, but what the debt is used for. While I do agree with your assertion, I would like to say that borrowing for recurrent expenditure is a recipe for eventual disaster. However, borrowing to support production and infrastructure provides a base for more employment, import-substitution, exports, etc. All this eventually lead up to increased revenue to the govt due to the expanded tax base.

Meiji:
Actually it's not clear "to the biggest critic" what the Lagos State government has done with the borrowed funds. Didn't the Lagos State government also benefit from high crude oil prices, like everyone else? Why has the Lagos Metroline not been completed (despite promises that it would be finished by June 2013)? Isn't that an example of failed promises?

It's only not clear to those who have chosen not to see. Go below and see some. It's currently being updated.
https://www.nairaland.com/2322688/fashola-vs-akpabio-updated-projects
U mentioned Metroline being not completed, than God u didnt say abandoned. At least u can see that work is ongoing. When u talk of failed promises, u must refer to the floating cities Jonah-daft promised us down here in ss and the fool didn't do. Not lagos.


You talk about "borrowing to pay salaries". What about Ogbeni Rauf and Rotimi Amaechi that haven't paid their workers? What do you have to say about that,

All governors are complaining of dwindling income even at that it's no excuse for not paying salaries. For Rauf, i condemn in totality and he has to pay up and he shouldn't borrow to pay salaries the way Jonah-daft is doing. but for Amaechi, how many months do u think he is owning? Don't be deceived by fools on this forum. He is owning just one month for all and 2 months for some and 3 months for few. He has promised to pay up before he goes.
Above all this thread is about Jonah-daft govt. Open another thread for states.


Demdem?

For where?

I'm not trying to defend this administration (it has had many failures). My point is that we need to stop this partisan agenda of painting Jonathan as the sole problem with Nigeria. APC state governments also bear a large part of the blame for the collective mess the country is in.

Jonah-daft may not be the sole problem but he is the core problem. More than half of our resources go to him so he should carry most of the blame also.
Even before any of these states go borrow especially from outside, the fg headed by him needs to approve.
U talk of apc states, are there not pdp states? Who is their leader?
If u want to discuss states, open another thread but this is about the misgovernance perpetrated by this cursed govt headed by the drunkard.

grandstar:
If the government had slashed the labour force and removed the subsidy after the increase of in the minimum wage to 18,000, government freed as much as 1.8trillion.

The lack of political will to cut the size of the civil service and remove the subsidy is the cause of the problem.

Will Buhari be bold to do the needful?

bushdoc9919:
In addition, borrowing for recurrent expenditure is a common thing amongst oil rich economies....especially when the oil price falls.

We have been down this road before....back in the 1980's.

temitemi1:
GEJ my HERO! FAYOSE my ROLE MODEL!!

omonnakoda:
In the over five years that President Goodluck Jonathan has been presiding over the affairs of the country, the Federal Government has borrowed N5.04tn from the domestic debt market.

Jonathan became Nigeria’s acting President on February 10, 2010 and substantive President on May 6,2010 following the death of President Umaru Yar’Adua on May 5,2010. On May 29, 2011, he was sworn in as an elected president.

Records at the Debt Management Office showed that the domestic debt of the Federal Government stood at N3,466,360,000,000 (N3.47tn) as of March 31, 2010.

The latest debt statistics from the DMO as of March 31, 2015 showed that the domestic debt had risen to N8,507,545,474,000 (N8.51tn).

This means that in the last five years, the Federal Government had borrowed N5.04tn from domestic lenders. It also means that within the period, the domestic debt of the Federal Government grew by 157.48 per cent.

A breakdown of the domestic debt profile of the Federal Government by instruments showed that FG Bonds accounted for N5.37tn or 63.13 per cent of the total domestic debt.

The Nigerian Treasury Bills, on the other hand, accounted for N2.87tn or 33.68 per cent of the Federal Government total domestic debt profile.
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Similarly, the Nigerian Treasury Bonds accounts for N271.22m or 3.19 per cent of the Federal Government’s total domestic debt profile.

The DMO statistics also showed that the domestic debts of the states grew by 116.83 per cent within the same period.

As of March 31, 2015, the domestic debts of the states stood at N1.69tn or $10.87bn. However, as of March 31, 2010, the domestic debts of the states which were only given in dollars stood at $5.01bn.

This means that in dollar terms, the domestic debts of the states rose by $5.85bn or 116.83 per cent in the last five years.

Within the same period, the external debts of both the federal and state governments rose from $4,306,180,000 ($4.31bn) to $9,464,110,000 ($9.46bn).

This means that within the five-year period, the external debts of both tiers of government rose by $5,157,930,000 ($5.16bn). In percentage terms, the external debts of both tiers of government rose by 119.78 per cent.

The latest debt figures released by the DMO did not segregate the external debts of the country into the proportions owed by the Federal Government and the various states of the federation.

As of December 31, 2014 when the debt figures were last segregated, the states’ component of the nation’s external debt profile stood at 33.63 per cent while the Federal Government’s component stood at 66.37 per cent.

With $1,169,712,848.66, Lagos State occupied the top position on the list of the most externally indebted states.

It was followed by Kaduna, $234,416,052.15; Cross River State, $131,469,661.94; Edo State, $123,128,295.53; and Ogun State, $109,154,553.08.

The least exposed states in terms of external debts were Taraba, $22,780,063.89; Borno, $23,067,549.16; Delta, $24,233,639.67; Plateau, $30,947,579.75; and Yobe, $31,237,619.25.

The increasing profile of the nation’s domestic debt has been reflecting on the cost of debt servicing.

According to budgetary provisions, the cost of debt servicing went up from N591.76bn in 2013 to N712bn in 2014. This was made up of N663.61bn for servicing domestic debt and N48.39bn for the foreign debt component.

A statement by the DMO last week said the debts of the country, especially those owed by the Federal Government, had not grown unusually in the last four years. It also explained that the debts had been rising because of budget deficit financing.

According to the office, the increase in public debt between 2011 and 2014 was the lowest compared to the period 2004–2007 and 2008–2011.

The DMO said, “In 2010, there was a general wage increase (53.7 per cent average increase) for all categories of public servants, including political appointees. The funding of this depended on increased domestic borrowing.

“The global economic and financial crisis (2008-2010) occurred within the same period. All economies engaged in counter-cyclical public spending, using what was popularly referred to as stimulus package.

“In Nigeria, the government was able to effectively play the role by borrowing from a domestic bond market, which to the country’s credit, had been developed as an alternative source of funding after the exit from the Paris and London Clubs debts in 2005 to 2006.

“While the Federal Government’s debt stock has grown, a comparison with the figures before the exit from the Paris Club should not be on absolute figures alone. The size of the GDP and the structure of the debt must be taken into consideration.

“The increase in the domestic debt was due principally to the financing of the deficits as appropriate in the annual budgets. The budgets include both capital and recurrent expenditure; thus, the deficit cannot be attributed to a single item on the budget.

“In the case of external borrowings, which are mostly from the multilateral financial institutions; the utilisation of the proceeds are tied to projects – in power, agriculture, health, education – and other infrastructure and human development projects.”

The Debt Office added that public borrowings were done in accordance with the mandate of the National Assembly.

Finance experts, who spoke to our correspondents, on the issue, called on the DMO to ensure that it did not go beyond the acceptable limit of debt to Gross Domestic Product Ratio

An Associate Professor of Finance, Nasarawa State University, Keffi, Uche Uwaleke, said that the increase in the debt could also be looked at from the standpoint that the economy was growing.

He said, “One important point you should realise is if the debt is sustainable. If it is sustainable relative to the size of economy, then it should not call for concern. As long as we are operating within the acceptable threshold of debt to GDP ratio, then it shouldn’t be of much concern.

“But that doesn’t mean we should continue to borrow, the DMO should do all within its powers to manage the debt stock within a sustainable level.

“Again, the worrying aspect of it is the fact that in the past for instance, we borrowed money to finance consumption. We borrowed money to meet the demand for increase in wages and salaries and we have not recovered from that up till now because if you check the 2015 budget, the provision that has been made for debt servicing is as a result of the impact of that borrowing area.”

Also, Bismarck Rewane, who is the Chief Executive, Financial Derivatives Company, who described the debt as huge, said that Nigeria was spending about 25 per cent of its revenue on debt servicing.

He said, “The debt servicing burden is quite high. The debt has to be restructured because what we are seeing now is that the debt-to-GDP is high. We are spending almost 25 per cent of our revenue to service debt and that is why I say it is quite high, and again we have another large percentage that is spent on subsidy. When you consider all these, you will find out that there will be nothing left to run the economy.”

A former President, Association of National Accountants of Nigeria, Samuel Nzekwe, said the country’s debt would slow down the development of capital projects across the country.

The Chairman, Institute of Chartered Accountants of Nigeria, Abuja District, Mr. Adewale Gbakinro, said it was wrong for the Federal Government to borrow as much as N5tn in the last five years when oil sold for more than $100 per barrel for most of the period under review.

Gbakinro said, “Much of the borrowings were spent on recurrent expenses. It does not make sense to me to borrow to pay salaries.

“The amount of money being spent in Nigeria to run government is not right. I know that democracy is costly but a lot could have been done through financial discipline.”

Gbakinro listed the budget for feeding at the Presidential Villa and the maintenance of the presidential fleet as some areas that government could have cut down on the cost of governance.

http://www.punchng.com/news/jonathan-govt-incurs-n5tn-domestic-debt-in-five-years/

Meiji:
Actually it's not clear "to the biggest critic" what the Lagos State government has done with the borrowed funds. Didn't the Lagos State government also benefit from high crude oil prices, like everyone else? Why has the Lagos Metroline not been completed (despite promises that it would be finished by June 2013)? Isn't that an example of failed promises?

You talk about "borrowing to pay salaries". What about Ogbeni Rauf and Rotimi Amaechi that haven't paid their workers? What do you have to say about that, Demdem?

I'm not trying to defend this administration (it has had many failures). My point is that we need to stop this partisan agenda of painting Jonathan as the sole problem with Nigeria. APC state governments also bear a large part of the blame for the collective mess the country is in.

omenka:
What exactly can one commend this administration for??

bushdoc9919:
All good ideas....that will lead to the removal of the government.

Because unfortunately due to our oil dependent economy., we do not have a vibrant private sector that would have absorbed all them sacked staff.

(Yes JJ Rawlings did it in the 1980's in Ghana...and people suffered. But the economy improved!).

As for removing the subsidy....it is a good idea....but sadly most Nigerians only see the price at the pump....not the long term savings that would have been made.

Your ideas are good......but this is Nigeria.Good does not work here at all.

Ikengawo:
90% of the people that read this article don't know that even to start a small business a man needs to go into debt.

bushdoc9919:
In addition, borrowing for recurrent expenditure is a common thing amongst oil rich economies....especially when the oil price falls.

We have been down this road before....back in the 1980's.

Bevista:
I don't think countries like Canada, Norway, Kuwait, Saudi Arabia, etc would necessarily agree with you. Even if they did, these are developed economies with strong foreign reserves and good infrastructure.

A developing country like Nigeria cannot tow that path, except we want to wake up 10 years after and then ask ourselves "how did we get here?" Just look at our GDP and Per Capita income - while it is growing in Nominal terms, it is not growing in Real terms.

Ikengawo:
90% of the people that read this article don't know that even to start a small business a man needs to go into debt.

Eruditor:
It is a lie. When Oil prices go high, countries save so that when they go low they would have reserves to help augment revenues. Saudi Arabia and Norway both have more than 800B $ stored in their FR. Algeria has over 100B $. But Nigeria under GEJ has just 29.9B $.

That is the problem.

Ikengawo:
90% of the people that read this article don't know that even to start a small business a man needs to go into debt.