By Patience Saghana
ABUJA — Nigeria’s total debt stock as at the third quarter of the year is put at $32.5 billion, according to a review of Medium Term Expenditure Framework, MTEF, carried out by the Centre for Social Justice.

The review, which was made available to Vanguard yesterday by Mr Eze Onyekpere, a social activist on budget tracking, analysed that the $32.5 billion debt of the country comprised $28 billion internal debt and $4.5 billion external debt, totalling $32.5 billion debt as at September 2010.

According to Onyekpere, “the total debt stock as at September 2010 is $32.5 billion, made up of $4.5 billion external debt and internal debts of $28 billion. Nigeria’s current debt is in excess of our total debt in 2005 when the debt relief package was negotiated. The total debt in 2005 was $32,306.73 as against our current debt of $32.5 billion.”

The MTEF 2011-2013, he said, had been prepared by the Minister of Finance, endorsed by Executive Council of the Federation, EXCOF, and submitted to the National Assembly for its approval.

The preparation, he remarked, started a month late after the statutory time for its endorsement by EXCOF, which led to late endorsement by EXCOF and late presentation to the National Assembly”.

He explained: “The MTEF was based on the Medium Term Sector Strategy, MTSS, of only 13 key Ministries, Departments and Agencies of Government, MDAs, instead of extending the MTSS to all MDAs as expected under the Act.”

“When this figure is added to the request for the approval of $3.7 billion currently pending before the National Assembly, the total figures by 2011 will amount to $32.5 billion plus $3.7 billion plus $12.1 billion which adds up to $48.3 billion. If this crystallizes, the nation’s debt to GDP ratio will be 18.91 percent. The implication of this is that higher sums of money will be required in the budget for debt servicing and repayment purposes.”

The Debt Sustainability Analysis, DSA, recommended a total borrowing of $7.1 billion for the year 2011 which should be sourced from domestic and foreign sources in the ratio of 60:40.

However, the Medium Term Expenditure Framework, MTEF, is projecting N1, 815.60 billion as domestic borrowing in 2011. This translates to about $12.1 billion at N150 to one US dollar, which is $5.1 billion in excess of the DSA recommendation.

The MTEF review relayed “With more borrowing in the local and international financial markets, the demand for more resources to service and pay back debts will crystallize.”

And since the borrowed money is not invested in growth, value creating and income generating capital expenditure, it would be more difficult to pay back the borrowed money over the years. The emergent deficit is in excess of 3% of the GDP”

“The percentage of retained revenue to overall budget is 53.35percent, 53.87percent and 52.61 percent for the years 2011, 2012 and 2013 respectively. The percentage of deficit to overall budget is 46.65 percent, 46.13 percent and 47.39 percent for the years 2011, 2012 and 2013 respectively”.

“The percentage of the deficit to aggregate (retained) revenue is 87.43 percent, 85.64 percent and 90.08 percent in 2011, 2012, and 2013 respectively.   Also the deficit as a percentage of non_oil GDP is 8.51 percent, 7.86 percent and 7.73 percent for the years 2011, 2012 and 2013 respectively”.

“The deficit funding for recurrent expenditure is N1, 076.25billion, N1, 140.27billion, N1, 320.89billion for 2011, 2012 and 2013 respectively. All the foregoing percentages and figures clearly show that the deficits are not sustainable’.

The review analysed that the single digit inflation rate project might just be a mirage as against the current rate of 13.4 percent.

The exchange rate, the review said, “is to stay at N150 to 1USD over the medium term. However, with depleting foreign reserves and a depleted Excess Crude Account (ECA), this may also be difficult to sustain, as the defence of the Naira will draw down the foreign reserves to unacceptable low levels over the medium term”.