The Lagos Chamber of Commerce and Industry (LCCI) have expressed concern over Nigeria’s public debt which stood at $48.5bn (N7.1trn) as at December 2012.
Of the amount, domestic debt accounts for $41.97bn representing 86.5 per cent, while external debt accounts for $6.53bn, representing 13.5 per cent.
Speaking at its first quarterly press conference on the state of the economy, the President of the Chamber, Mr. Goodie Ibru, said it is clear that the issue of domestic debt presents a big challenge for the economy and is beginning to raise sustainability concerns.
According to him, cost of debt service is on the high side and in the 2013 budget the sum of N591.8bn was earmarked for debt service, adding that in 2012, the amount was for debt services was N559.6bn
LCCI President said that the high yield on the Federal Government bond and treasury bills contributed to this level of debt service.
“The amount being currently used to service debt is about 36.5 per cent of the capital budget of the Federation.
“The debt figures by the Debt Management Office do not capture the entire ramifications for the national debt. For instance, debt owed to local contractors by government ministries and agencies, which run into billions of naira, are not captured. For several years, many of these contractors have remained unpaid and some have even gone bankrupt”, he said.
He added that the bonds issued by AMCON, which is well over N4tn is also not captured in the debt records and it is necessary for all these to be brought into the picture, so that the true position of the public debt and its sustainability would be better appreciated.
On agriculture sector, Ibru urged the fiscal and monetary authorities to scale up the capitalisation of the Bank of Agriculture so that credit access will be available and the kind of attention being given to the Bank of Industry should be extended to Bank of Agriculture.
Commenting on developments at the Nigerian Stock Exchange, the LCCI President, said that the first quarter was on a positive note as one of the best performing equity markets in the world, saying that indicators such as market capitalisation of the listed equities rose by N1.76tn or 19.6 per cent, from N8.97tn recorded at the beginning of the year to N10.733tn.
He, however, pointed out the need to diversify the economy, noting that the risk to sustainability of current levels of oil prices is real.
Source: National Mirror