Nigerian FG External Debt is U.S. Billion --Okonjo-Iweala

Nigeria's external debt was five billion dollars (about N750 billion) at the end of 2009, World Bank Managing Director Ngozi Okonjo-Iweala said.

Okonjo-Iweala said the Federal Government also carried a domestic debt burden of N3.23 trillion(21.8 billion dollars) during the period.

The former Nigerian finance minister stated this at a lecture on the 24th and 25th convocation ceremony of the University of Calabar, yesterday.

She said Nigeria's external debt profile was 3.5 billion dollars in 2006 and attributed the rise in external debt to "the pace of Gross Domestic Product (GDP) growth.

"In April 2006, Nigeria paid off the last instalment due on its debt settlement agreement with the Paris Club, thereby erasing 30 billion dollars in external debt and reducing government external debt to 3.5 billion dollars."

Similarly, the former finance minister said the current Federal Government's domestic debt virtually doubled from about N1.7 trillion (13.6 billion dollars) at the end of 2006.

She said the country's debt portfolio was apprehensive, adding that the situation was worsened by the realisation that about 20 per cent of the domestic indebtedness was held by foreigners.

For the internal debt, she said one of the bad sides was that banks and other financial intermediaries would prefer to invest in "safe" government bonds than make "risky" loans available to the corporate sector.

She deplored the government's practice of sharing the Excess Crude proceeds, saying the action negated the essence of the establishment of the account.

She expressed regret that a total of 20.1billion dollars which was available in the Excess Crude Account at the end of 2008 had, by the end of 2009, dropped to 7.8 billion dollars.

Okonjo-Iweala described the sharing habit as reckless and advocated the investment of the excess crude proceeds in the agriculture and power sectors to grow the economy.

She noted that some states and even the Federal Government could not account for expenditure of the funds and urged the public to strive always to be abreast with government expenditure.

"You must know how much the states get every month and how they spend it," Okonjo-Iweala said.

She urged students to take up the challenge and begin to enquire into government income and expenditure as it was the right of every citizen to know everything about government.

Meanwhile, Okonjo-Iweala, says the ongoing reform in the banking sector in Nigeria is in the right direction.

"I support the reform because the substance of the exercise is right", she declared in her lecture on Thursday in Calabar, at the convocation of the University of Calabar.

She, however, said that implementation of the reform should be transparent and regularly brought to the public domain "so that Nigerians, especially the educated and the interested, will be carried along".

The former Finance Minister explained that she endorsed the exercise reform because the bankers themselves acknowledged that they had a problem and had set out to solve it

"Owning up to a problem and cleaning it up is more honourable and acceptable than covering it up and extending it", she stated.

She attributed the bank crisis to indiscipline of key players in the sector, saying that the issues involved were being deliberately glossed over by those who should check it.

Okonjo-Iweala noted that the global financial meltdown was caused by failure of regulation of critical financial institutions and issues in the world's fiscal market, particularly the stock sector.

She traced the crisis to the U.S. where, she explained, transactions in financial products were being carried without regulation.

She, however, disclosed that the recovery process had begun, noting that although fragile, the rate was between one and two per cent in the developed countries.

She put the recovery rate at 3.6 per cent in African economies, adding that the growth would be noticed in the later part of 2011 and well into 2012.

Some home truths from a daughter-of- the-soil. And it is a challenge to those members who know what to look for.

Originally Posted by chinex

She urged students to take up the challenge and begin to enquire into government income and expenditure as it was the right of every citizen to know everything about government..

I pray they will listen.