Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, says Nigeria’s economy is experiencing positive development, citing Progressive trends in key economic indicators.
The Minister made the declaration while speaking to journalists at the State House on Tuesday after the Federal Executive Council (FEC) meeting, chaired by President Bola Tinubu.
Mr Edun, who disclosed that he submitted a memo on how to strengthen the Nigeria Customs Service (NCS), explained specific indices that have beclouded the true state of the economy, adding that the administration had re-addressed practices that had burdened the economy.
According to Edun, the country’s total debt stock in US dollar terms decreased by 15% in the first quarter of 2024, a development he described as “very positive.”
However, the total debt stock in Naira terms increased by 25% when factoring in exchange rate movements and domestic debt issuance.
The Minister emphasised that the government’s revenue collection has been robust, a development he attributed to technology-driven initiatives, and that expenditure controls are also being implemented.
He noted that the federal government has not relied on ways and means to fund its operations, underscoring the feat as a departure from past practices.
Edun highlighted that the current administration inherited a legacy of N2.7 trillion in outstanding ways and means, which are being audited and securitized, explaining further that despite this, the current ways and means deficit stands at N3.4 trillion, which is offset by operating surpluses from revenue-generating agencies.
“I gave the Council a verbal briefing that I’m given now, and I will start by saying that when we interrogate the figures over the first quarter of this year, starting end of December and end of March. If we want to be positive, all we will say is that the glass is half full, we are halfway there. If not, we can be negative and try and say the glass is half empty.
“Why do I say this? The debt stock, the total debt stock of Nigeria in US dollar terms fell by 15%. That is very positive, any rating agency, any creditor, and any investor looking at that will see it as a positive move.
“We’re a country that has petro-dollars. We have the ability to earn in dollars. So it’s highly relevant, that we look at what is our exposure in dollar terms. On the other hand, given the exchange rate movements, even though there was like an N8 trillion increase in actual debt issuance, the total debt stock, when you count domestic debt which, as I said there was an increase in issuance when you count the total external debt and domestic debt in Naira terms, it has increased by 25%.
“That’s mainly due to the foreign exchange movement, which can change tomorrow, as we know. Linked to that is the all-important question of the government’s capacity to pay its way, debt, credit is all about the revenue to service and of course, to use those funds properly, judiciously, accountably and in a way that gives positive returns.
“I can say quite categorically that under President Bola Tinubu, the federal government does not rely on ways and means to fund itself. At no time have we gone to Mr. President and requested permission to seek funding from Central Bank to pay anybody, be it external debt service, be it share capital cash calls or any other of the liabilities that the government has.
“As with all agencies, we are focused on ensuring that the revenue that is due to the federal government is collected robustly, using technology avoiding the blockages, which manual processing can cause and it has led to a very robust revenue effort and likewise, we are implementing expenditure controls, also very ably empowered by technology.
“So within that context, what we have is that we had a legacy, Mr. President inherited a legacy of N2.7 trillion in outstanding ways and means, which have been securitized on the eve of the entry of President Tinubu’s administration.
“Naturally, we are auditing, we’re doing a forensic audit and interrogating that figure, because it’s a liability which we have to pay interest on, so any deficits that you might see, to the ways and means, to the consolidated revenue account, maybe automatic debits on a figure that is still being interrogated, but as a matter of fact, the current ways that means the deficit is N3.4 trillion.
“As I said, we collect the operating surpluses of revenue-generating agencies by law under the Fiscal Responsibility Act and other legal guidelines and when we look at how much is outstanding, and how much is owed, we are positive.
“The amount that is owed and that we are claiming far out exceeds the N3.4 trillion in Ways and Means and as I’ve said before, we do not rely on ways and means to pay salaries, we don’t rely on it to pay external debt servicing or other obligations. That is the situation, the finances of Nigeria have been revamped”, Edun said.
Dominica Nwabufo
