Reps challenge Okonjo-Iweala over N712b debt servicing

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In Nigeria News Feed
Feb 9th, 2014
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The House of Representatives is appalled by what it sees as the unwillingness of Finance, Minister Ngozi Okonjo-Iweala to make public what it costs the nation to sustain and service its huge borrowings.

The lawmakers want the Minister to tell Nigerians the exact rate of interest and other service charge that come with the loans.

Chairman, House Committee on Finance, Abdulmumin Jibrin-led (APC, Kano), in a statement yesterday said leaders should stop comparing the nation’s economy with other countries without taking into consideration the different circumstances of each economy.

He said that the minister should explain why the cost of borrowing in Nigeria exceeds that of any other country in the world.

“No one is excited about the celebrated insignificant decline in domestic borrowing. What the people are asking is: borrowing at what cost? What is the cost of these so-called reduced domestic borrowings, how are they serviced? How are the decisions taken?” he said.

“Beyond that, since the Minister is in the habit of comparing our situation with those of other countries, why would she not tell Nigerians that the cost of our domestic borrowing remains one of the highest in the whole world.

“In 2011, our domestic debt stock was N5.6trn. It rose to N6.5trn in 2012, and by 2013 it climbed higher to N7.1trn.

“Domestic borrowing for 2011 stood at N852bn, N744bn in 2012 and N588bn in 2013. For 2014, it is put at N572bn.

“The cost of servicing the debt was N495bn in 2011. In 2012 it increased to N559bn and jumped to N591bn in 2013. In 2014 a whopping N712bn has been earmarked for debt servicing.”

The Committee also noted that the rising recurrent expenditure component of the 2014 budget, like previous ones, calls for concern.

The Committee requested Okonjo-Iweala to furnish it with government’s plans to address the situation in favour of capital expenditure.

His words:”It does not help to keep laying the blame at the doorsteps of previous administrations or attempt to drag late President Umaru Yar’Adua and President Goodluck Jonathan into the problem.

“The Minister said cuts have been made in the recurrent expenditure but in what areas and by how much? Our recurrent expenditure in 2011 stood at N2.4trn. In 2012 it rose to N3.4trn and dropped to N2.4trn again in 2013. In 2014 it has risen a little higher to N2.43trn.

“In acknowledgement of her established reputation as a world-class economist and banker, President Jonathan called her home from the US to help provide direction and improve the economy.

“Dr. Okonjo-Iweala should let us know if this challenge surpasses her expectation, therefore, she is finding it difficult to cope. It is high time some people in public office stopped believing they possess the monopoly of knowledge.”

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