*As FG assures private sector on removal of barriers to productivity

BY PETER EGWUATU

LAGOS — Nigeria will this year slash its domestic debt from around N6.35 trillion ($40 billion) because double-digit interest rates make the cost of servicing it too high, the Minister of State for Finance, Dr. Yerima Ngama, has said.

He spoke, yesterday, at a breakfast forum organised by the Nigeria Economic Summit Group, NESG, in which six cabinet ministers were in attendance.

He said it cost N699 billion to service debt last year, adding: “The cost of domestic debt is still very high. We are discussing with the bankers’ committee the high cost of interest rates.”

Ngama said Nigeria had set up a fund starting at N100 billion that would begin retiring domestic debt from this year, noting that the overall debt to GDP ratio was 18.2 per cent at the end of 2012, up from 16 per cent a year earlier.

According to him, “Nigeria’s economy is growing as an investment destination as fiscal stability improves, its currency stabilises and economic growth remains high. But investors are wary of a long-established tendency to mismanage oil revenues, mostly because of massive corruption.

“In absolute terms, the budget deficit was expected to fall to N585 billion in 2013, from N744 billion last year.”
The Budget Office said last month the deficit would fall to 1.85 per cent of GDP in 2013, from 2.85 per cent last year.

“Nigeria has a very strong balance sheet now, compared with a decade ago,” Ngama said.
Nigeria’s debt to GDP ratio is low by world standards but high for a nation that still ranks among the top 10 oil exporters – it pumps out two million barrels of oil a day, almost all sold abroad. Much revenue is spent on a bloated civil service, and Ngama said 60 per cent of government spending was on salaries last year.

Romoval of barriers to productivity

Meanwhile, the Federal Government has assured Nigerians of its readiness to remove all barriers that hinder productivity and investment in the country to enhance economic activities in the country.

The government called on Nigerians to alert the government through whistle blowing in the area of economic sabotage, such as smuggling of goods, of pipeline vandalism and other vital government infrastructure  in every sector of the economy to bring perpetrators to book.

The Federal Government also disclosed that it was committed to improving power supply in the country as generation of power had increased from 3,800 mega watts to N4,517. It also assured that NIPOST was not dead.

It confirmed that the Federal Ministry of Trade and Investment had been renamed Federal Ministry of Industry, Trade and Investment, MITI, with effect from March 9, 2013.

The Minister of Industry, Trade and Investment, Dr Olusegun Aganga, who led other ministers such as Finance, Power, ICT, Works, Transport and Health to present the Federal Government score card and ‘Global competitiveness of the country,” disclosed this development at the meeting with the private sector.

The ministers in attendance include: Communication and Technology, Mrs. Omobola Johnson;  Minister of State for Finance, Mr. Yerima Ngama; Minister of State for Power, Hajiya Zainab Ibrahim; Transport, Senator Idris Umar; Works,  Ambassador Bashir Yuguda and Minister of State for Health, Mr Muhammad Ali Pate.

According to Aganga, “Manufacturers Association of Nigeria, MAN, has been the leading voice in the call for name change when government named the former Ministry of Commerce and Industry in 2011 as Ministry of Trade and Investment.”