Nigeria’s total debt rose to N33.1 trillion at the end of Q1 2021, from N32.9 trillion recorded as of the end of Q4 2020. Data from Debt Management Office (DMO) states that the federal government spent N1.02 trillion on debt serving in Q1 2021, a 36% year-on-year jump on the Q1 2020 number. As things stand, Nigeria’s debt servicing is growing faster than its revenue, creating a major paralysis.
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A sum of N537.78 billion was used to service FGN Bonds in the review period. This represents a 124.6% increase compared to N239.46 billion recorded in Q1 2020.
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Nigeria repaid a sum of N31.44 billion as principal repayment, while N35 billion was used to service Nigerian Treasury Bills.
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In terms of external debt, $134.04 million was used to service multilateral loans, which includes $104.4 million to International Development Association, $16.21 million to AFDB, and $9.5 million to African Development Fund.
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Also, $106.3 million was used to service bilateral loan agreements, while $763 million was spent on Euro bonds.
But besides these numbers, looking at Nigeria before and after the big border closures, one can see severe cracks. Though I am still expecting economists to do a deep dive, the borders could have possibly wounded Nigeria’s economy when you look at food inflation, acceleration of criminality due to food scarcity, etc.
Economically, in the last 6 years, you can divide the economy before and after the border closures.
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Looking at some data from some light manufacturers who export to Cameroon, Benin Republic, etc, there is clear evidence that during the closure, most found alternatives – and Morocco captured most of the opportunities. Post-closure, most have not been unbundled.
Possibly, Nigeria is a net gainer in the region and border closure was an own-goal. If that is the case, we must not repeat the same again. That is critical as we cannot afford to budget N13.6 trillion and waste N4 trillion on just servicing debts as we continue to look for money to hold the economy together.
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I have asked several times on the gains of border closure, no one has explained, but we want to pretend that it never happened. Nobody bears consequences of bad judgement here, rather you see people doubling down, not minding how much damage they have caused.
Again, we always fantasize on exports, how we wish to produce what we consume and also export, yet to see any economy that has done so successfully. Trade is a two-way flow, you import some and export some, but if you frown at importation, then forget about exporting anything.
It is not correct to believe that naira suffered because of importation, rather it’s our own inability to export; we have been importing things for ages, yet inflation has never been this ridiculous. Rice is the commonest food here, and there were years we imported more than 80%, and naira didn’t collapse. Now we have entered a territory where irrespective of what we do we keep losing.
Something is not working, and it needs fixing…