Read How Nigeria Loses 6.33trillion NGN (photos)

Read How Nigeria Loses 6.33trillion NGN (photos)

Did you know that Nigeria's real debt stock now hitting N19tr and by this, the country will spend an equivalent of its 2016 budget to service debts as its currency, the naira, continues to lose value against the United States dollar.

Devaluation has put the real value of the country’s debt stock at around N18.9 trillion, when considered at the official rate of N307.79 per dollar, according to figures from the Debt Management Office.

The additional naira stock (per dollar) that would be needed to service existing debt will cause the country to lose about N6.33 trillion, a near-equivalent of the 2016 budget, when compared to N12.6 trillion at N197 per dollar as at December 31, 2015. It is also a disincentive for future external borrowing despite a positive debt-to-GDP ratio.

“Hiding under the mantra of low debt-to-Gross Domestic Product is deceitful,” a public sector financial analyst, who asked not to be named, told The Guardian in Lagos at the weekend. “The economy is in recession and cannot churn out those activities anymore.

“If we compare our debt service bill without revenue earnings ratio, it is not sustainable and that is where foreign investors will be looking at to price our international bonds,” the public sector analyst said.

“With more than 21 per cent of the entire budget dedicated to debt service and more than 33 per cent of the total budget being in deficit, the budget performance is now made worse with near-non-activities called recession. The reality is daunting,” the source said.

The additional N6.33 trillion required to pay off Nigeria’s external debt represents 20.58 per cent, a one-fifth of its estimated $296 billion, or N91 trillion GDP.

The national debt stock consists of external obligations for both federal and state governments estimated at $11.3 billion (about N3.5 trillion); domestic obligations of $37.5 billion (about N11.5 trillion) and $12.7 billion (about N3.9 trillion) for federal and states respectively.

The devaluation was necessitated by the plummeted foreign exchange earnings, which created huge unmet demand due to the shortage of dollar and naturally erased the value of the local currency through speculations.

The debt report released by the Debt Management Office came two weeks behind schedule and put the debt stock by June 30, 2016 at $61.45 billion. The report stressed that the figure was higher in naira value than the $71.66 billion posted on March 31, 2016.

The amount, also at current official rate of N307.93 per dollar is higher than the estimated $65.43 billion debt worth N12.6 trillion as at December 31, 2015, at N197/$.

With a planned N1.8 trillion borrowing to fund the N2.2 trillion deficit in 2016 budget, from a mix of dollar-denominated and local debts, the country’s obligations and associated service bill will rise to new record high soon.

Already, the 2016 budget had a debt service provisioning in excess of N1.4 trillion, representing more than one-fifth of the entire budget plan.

The combined forces of devaluation and inflation, also took toll on the nation’s economic activities between December 2014 and 2015, eroding naira value, as well as pushing the sovereign debt stock to ₦12.12 trillion.

The Central Bank of Nigeria (CBN) had in November 2014, tactically devalued the naira and barely three months later, it devalued the local unit further to ₦199/$.

Besides the concern for eroded value of the currency, which requires more naira to offset the debt stock when denominated in dollar terms, a conservative estimate of about N920 billion was lost to the then exchange rate, occasioned by devaluation, even at lower debt stock of $63.5 billion (June 2015), compared to $67.7 billion in December 2014.

The national debt stock as at then showed that the Federal and States external obligations as at December 31, 2014, stood at ₦11.2 trillion ($67.7 billion), but moved to ₦12.06 trillion ($63.5 billion) three months later and ₦12.12 trillion ($63.8 billion) as at June 30, 2015.

Given the eroding value, Nigeria lost about ₦920 billion to devaluation, with respect to the debt stock, representing 8.2 per cent loss over the actual value in six months.

Also within the period under review, the inflationary trend has been on persistent upward movement. Although still in single digit, it moved from eight per cent to 9.4 per cent, trend, defying all liquidity tightening measures of the Central Bank of Nigeria.

Still, the estimation of ₦920 billion loss appears to be conservative, given the fact that the domestic debts of sub-national governments (states) were denominated in dollar at the 2013 exchange rate of ₦155.7/$, which is not attainable now.

For example, if the states’ domestic debt profiles were denominated in current dollar exchange rate at ₦307.79, the total estimate would push losses far beyond N1 trillion mark.

Trump VS Clinton: Most-Watched US Presidential election debate in history

Trump VS Clinton: Most-Watched US Presidential election debate in history

The U.S Presidential election debate that will hold tonight between the two strong rivals; Hillary Clinton and Donald Trump. It will be the most viewed presidential debate in history with some commentators forecasting Super Bowl-sized viewership of around 100 million Americans.

The debate will be live, unscripted and unpredictable and is expected to break the record TV audience of 80 million for the 1980 Presidential debate between Jimmy Carter and Ronald Reagan.

The predicted high viewing figures is as a result of the the extraordinary nature of the campaign, featuring Donald Trump, the outspoken Billionaire businessman and former reality TV star, competing for the White House with Hillary Clinton, the former U.S. secretary of state and first woman to run for the White House.


"My prediction is a 100 million audience, and maybe more," said Paul Levinson, a communications professor at New York's Fordham University and author of "McLuhan in an Age of Social Media."

"The Super Bowl shows that when there is something that is really special, something that can command people's interest, something you want to see on a big screen, television has this enormous power and reach," Levinson said.

CNN

See the Wrangler Jeep Paul Okoye bought for his son

See the Wrangler Jeep Paul Okoye bought for his son 

 

 

 

 

Read Senator Dino Melaye's 56th Independence Anniversary Speech

Read Senator Dino Melaye's 56th Independence Anniversary Speech

Here is the Independence Message by Senator Dino Melaye (Kogi West) calling on the leadership at all levels of governance to sacrifice more to serve both as an example and an inspiration to the citizenry in order to pull the nation out of the current economic recession.

" 56 years of independence as a sovereign state should, and ought to be a time to roll out the drums and celebrate our journey to true nationhood. Unfortunately, the present economic hardship has denied Nigerians this luxury. What is required under the circumstances is modesty and deep introspection on how we got to this sorry pass. But more importantly , the current times calls for more sacrifices on the part of the leadership from the local, state to the federal levels". He added:

" Unlike so many other relationship fundamentals, leadership is a top-bottom dynamic if it must inspire and command loyalty and the needed follower-ship. At times like this, the leadership must sacrifice more, give up some of its pecks of office, show more compassion and empathy, and desist from leading opulent and offensive lifestyles that are capable of inflaming passions amongst the suffering masses.

"The change Begins with Me" gospel will resonate more with the people if those at the helm of affairs show the way and lead by example. While very tangible sacrifices are required of the leadership at the moment, perhaps the leaders can begin with a symbolic gesture. Since names and appellations matter, those at the helm of affairs must immediately drop those appellations that accentuates the existential divide between them and the citizenry until there is a marked improvement in the material condition of the people.

" In this regard, I recommend that henceforth no President, Vice President, Governor, or Deputy Governor should answer the name 'His Excellency' until the material condition of ordinary Nigerians has also become 'Excellent'. No Senator should continue to answer 'Distinguished' until the the masses of the people begin to experience a distinguished existence and no Federal or state Legislator should wear the badge of 'Honourable Member' until the ordinary citizen is himself living a life that can be classified Honourable in every material particular.

"This is a first significant step in erasing the class barrier that misleads those at the helm of affairs into believing erroneously that they deserve a better existence than the ordinary man on the street, and thereby conferring them with the delusional legitimacy to amass the public till on their behalf", he said.

Melaye is also offering his "Smart Solutions" to the current economic crisis bedeviling the nation which if implemented are capable of fast-tracking our way out of the recession. These Smart Solutions range from the mundane, to the very radical.

"As a means of addressing the dwindling state of revenues accruing to the federal government which is adversely affecting the implementation of the 2016 budget, deliberate effort must be made to attract Foreign Direct Investment (FDI) into the country. This can be achieved by improving the security situation in the North East and the Niger Delta since no serious investor will put his his resources in a climate where insecurity is a daily fare. Government's effort in this direction must be two-prunged : a combination of military action and a psychological warfare to win the hearts and minds of the people in the two besieged regions.

" Government must also devise ways to pacify the Niger Delta Avengers and other militant groups in the region through a very creative, robust and efficient Amnesty programme. This programme must also be implemented simultaneously with a robust and sincere "Marshall Plan" for the development of the region. The combined effect of the New Amnesty Programme and the Marshall Plan will not only ensure sustainable peace and development in the area, but also prevent the mutation of new militant groups in the future since there would have been a systemic disincentive for their emergence.

"Needless to add, sustainable peace in the Niger Delta would lead to the security of oil installations, boost oil and gas production, increase foreign exchange earnings, attract more revenue to the coffers of the governments at all levels, facilitate the implementation of budgets and ultimately result in a marked improvement in the standard of living of the generality of the citizenry, and not just for the privileged few", he emphasized, adding:

"The diversification of the economy away from the current mainstay-oil, to agriculture and manufacturing must also be pursued more aggressively if Nigeria must be pulled out of the recession in the shortest time possible. In this regard, access to single digit interest facilities to investors in the agricultural and manufacturing sectors should be made less tedious and seamless. Tax holidays can also be considered as an incentive to get more investors, both local and foreign to take to agriculture and manufacturing to create jobs and boost the real sector.

"Furthermore, relevant laws must be reviewed and new ones enacted to give states and local governments higher stakes and autonomy in the exploration and exploitation of solid minerals in their domains. This will breed competition amongst states and local governments, create jobs, boost the local economy and reduce unemployment, crime and other associated social vices".

Melaye, a dogged anti-corruption crusader and activist, is also recommending Presidential Pardon and Amnesty for Treasury Looters. There is a critical caveat though - Return the looted funds within six months of the declaration of amnesty or face the full wrath of the law.

"Though an unrepentant advocate for integrity and forthrightness especially from public office holders, l however sincerely want to recommend that Mr. President grants Presidential Amnesty/Pardon to all those who looted our treasury provided they return all proceeds of their loot to the government within six (6) months of the declaration of the Amnesty.

"This, I believe will encourage the voluntary return of the the looted funds, empower the government financially to immediately commence the implementation of projects and programmes that will stimulate the economy and raise the peoples' standard of living, and save the judiciary and other law enforcement agencies the agony of fruitlessly pursuing the looters in and out of the courtrooms. In the long run, this would be a win-win situation for both the government and people of Nigeria.

"At the expiration of the six months' 'Moratorium', all those who failed to comply would then me made to face the reality of aggressive and expeditious prosecution and eventual jail terms for convicts in accordance with the laws of the land", he concluded.

Senator Dino Melaye

Kogi West.