…Directs NNPC to remit $1.48bn to Federation Account
Oscarline Onwuemenyi 18 February 2015, Sweetcrude, Abuja – The Federal government says Nigeria’s domestic debt will rise this year as it borrows more to meet a shortfall in revenue caused by the plunge in the global price of oil.
Dr. Ngozi Okonjo-Iweala, Nigeria’s minister of finance
Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, who made the disclosure on Tuesday in Abuja, warned that the country is paying the price of its dependence on oil as a major source of revenue.
She noted that, “Our income is still coming from a source that is not diversified. Because of the drop in oil prices we will have a difficult year.’’
The Minister blamed lawmakers who had opposed her moves to use a lower oil price for budgeting and save the rest.
“A year ago before the fall in prices we said that we should save but we were not listened to. Today they’re saying we didn’t save,” she stated.
She explained that the additional domestic debt will go toward paying the salaries of government employees, adding that, ‘‘You cannot throw people out on the streets.’’
Nigeria, Africa’s biggest oil producer, depends on crude exports for 70 percent of government revenue and more than 90 percent of foreign income, making it vulnerable as prices plummeted more than 50 percent since last year’s peak in June. Pressure has mounted on the naira, which has weakened 7.5 percent this year, the most among 24 African currencies recently surveyed by Bloomberg.
Nigeria is also facing rescheduled presidential elections on March 28, and had trimmed spending by eight percent and reduced the proposed benchmark oil price twice, before settling for $65 a barrel in December.
Planned capital spending of 634 billion naira ($3.2 billion) this year is 15 percent of the total budget of 4.36 trillion naira, with recurrent spending, including salaries and overheads, representing about 80 percent.
Okonjo-Iweala noted, however, that the amount to be borrowed will now depend on the final scenario adopted after talks with the Senate this week. “Then we’ll know exactly how much more debt that we’ll raise,” she said.
Meanwhile, speaking on the outcome of the forensic Audit undertaken on behalf of the government by PriceWaterhouseCoopers on the alleged $20 billion missing oil money, Okonjo-Iweala said the ministry had written to the NNPC, asking it to remit the amount as directed by the auditors.