Director-General of the World Trade Organisation (WTO), Dr. Ngozi Okonjo Iweala, on Monday warned incoming state governors against acquisition of debt.
She gave the warning in Abuja during the opening of the 2023 induction for re-elected and elected governors with the theme: ‘Governing for Impact (Building Sub-national Governance), organised by the Nigeria Governors Forum (NGF).
According to Debt Management Office (DMO) in its Q4 report for the 2022 fiscal year, Nigeria’s total domestic debt stock was N27.55 trillion, while its external debt stock was N18.70 trillion (US$41.69 billion).
Okonjo-Iweala said: “We have challenges on the fiscal, debt, and monetary policy fronts.
Nigeria’s gross debt level has climbed from N19.3 trillion in 2015 to N91.6 trillion in 2023. The debt-to-GDP ratio has almost doubled from 20 percent to 39 percent over that time period.
“While the debt-to-GDP ratio may not look so alarming, as revenues decline, the burden of debt servicing has increased dramatically. The debt service to revenue ratio is certainly alarming, at 83.2 percent in 2021 and 96.3 percent in 2022, according to the World Bank.
“This means that at the federal level, after servicing our debt there is little room to pay for recurrent expenditures, let alone investment. The fiscal deficit of 5.3 percent of GDP is higher than our agreed fiscal rule of three percent of GDP. This has to be carefully monitored and brought down. Dealing with the fiscal deficit will of course be infinitely more difficult with an oil subsidy bill of N3.36 trillion for the first half of 2023 (or N6.72 trillion if it is not removed).”
Continuing, she disclosed that “the deficit is made worse by revenue losses from oil theft. The difficulties around this issue underscore the importance of political consensus – whether you are in government or in the opposition – on policies critical for nation-building.
“On the revenue side, states have a substantial responsibility. Too few states are raising internally generated revenue of any significance.
“According to analysis of data from the National Bureau of Statistics and State Audited Financial Statements by the civic-tech group BudgIT, 33 states relied on federal transfers for the majority of their revenue. For 13 of these states, monthly FAAC allocations accounted for over 70% of revenue.
“Aggregated Internally Generated Revenue (IGR) from the 36 states did rise from N1.2 trillion in 2020 to N1.61 trillion in 2021 – but this pales in comparison to FAAC allocations to states of N2.23 trillion in 2020, N2.42 trillion in 2021 (and N3.16 trillion in 2022).”
To this end, Okonjo-Iweala enjoined the state governors to invest in infrastructure, education and basic health systems, pay teachers, health workers and others their salaries, and retirees their pensions.
She added: “With our large numbers of educated people fluent in English – together with a deep network of connections to the diaspora – we are well positioned to seize these opportunities. But such businesses, like our tech startups, will struggle to thrive if we keep losing so many of our most skilled young people to emigration.
“Let me share some numbers. Over 15,000 Nigerians emigrated to Canada in 2021, joining 19,000 who had moved there in the previous two years. Estimates for 2022 are 20,000.
That is over 50,000 skilled Nigerians in the space of four years. In the first half of 2022 alone, the UK granted skilled worker visas to nearly 16,000 Nigerians.
Financial expert tasks them on IGR
On his part, the Managing Director/CEO of Premium Trust Bank, Emmanuel Emefienim, who spoke on the sidelines of the induction programme called on the state governors to increase IGR in their states.
He also urged them to stop the overdependence on the centre to develop their states, stressing that
“They (governors) should come up with innovative ways of raising IGR that they can use to drive development in their states.
You will face consequences in next election if you fail to deliver -Buhari
Also, President Muhammadu Buhari has tasked all the incoming state governors on the need to deliver on their campaign promises or face the consequences during the next general election.
Represented by his Chief of Staff, Professor Ibrahim Gambari, he highlighted the consolidation of Nigeria’s democratic process and urged the newly elected governors to fulfill their promises to the people.
While lauding the successful conduct of the general election, which brought about a new president and 18 newly elected governors, Buhari emphasised that democracy in Nigeria is alive, vibrant, and thriving.
With the elections now concluded, he urged the elected officials to focus on delivering the promises they made during their campaigns, just as he harped on the need for them to build the country of their dreams.
Buhari reiterated that democracy is an evolving process, requiring participants to continually reflect on and improve its critical elements to ensure inclusivity and restore faith in the voters, stressing the need for patience, tolerance, and the use of appropriate channels for seeking redress in cases of unfair practices during election.
He reminded the governors that as of May 29, they would be responsible for steering the affairs of their respective states for the next four years.
Buhari maintained that they would inherit both the assets and liabilities of their states and urged them to approach their roles with dedication and trust, as bestowed upon them by the electorate.
He emphasised that public officers who fail to meet the expectations of the people or deliver on their campaign promises would face consequences in the next elections.
Nigerians, he emphasised, desire peace, progress, and security, as well as access to quality education, healthcare, and social services.
Reflecting on the progress made since 2015, Buhari acknowledged the challenges posed by a difficult fiscal climate.
Nevertheless, he expressed pride in the foundation that has been built for a prosperous Nigeria, with strategic focus on infrastructure development, agriculture, and strengthening the armed forces, infrastructure investments, including roads, rails, airports, ports, and affordable housing, aimed to improve market access, linkages, and reduce supply chain costs.
Saraki cautions outgoing govs to avoid undue interference with successors
Similarly, former president of the Senate, Senator Bukola Saraki, former governor of Delta State, Chief Lucky Igbinedion and ex-governor of Niger State, Babangida Aliyu, have advised outgoing state governors to desist from wielding unnecessary influence on their successors after leaving office on May 29.
The three former governors gave the warning while sharing their experiences on life after office during the farewell dinner/book launch entitled: ‘Common Ground (Leading Change at the Subnational’, organised by Nigeria Governors’ Forum (NGF) for outgoing state governors in Abuja.
Saraki, who was also a former NGF chairman, urged all the governors-elect not allow people around them to cause unhealthy relationship with their predecessors.
He stated: “Outgoing governors, please from June 1, you are no longer governors; please allow your successors to do the work they have to do. Let them call you when they need you for advice.
“For those that are coming, those around you will always want you to have a head-on with your predecessors. That is a big mistake. Give your maturity and do that which is necessary, because the challenge ahead is beyond that.”
In his opening remark, the chairman of NGF and governor of Sokoto State, Aminu Tambuwal, said the event was to appreciate the outgoing governors and welcome the governors-elect.
He explained that the book launched at the event would help the governors in developing their plans and implementing them.
On his part, former governor of Gombe State, Ibrahim Dankwambo, urged outgoing governors to avoid meddling in the affairs of their successors as they leave office.
He said, “Be prepared for the visits of such institutions like the Economic and Financial Crimes Commission (EFCC), the Independent Corrupt Practices and other related offences Commission (ICPC) and the Nigerian Financial Intelligence Unit (NFIU), which may ask some questions that need answers.”
Also speaking, former governor of Niger State, Babangida Aliyu, counselled all the outgoing governors “not try to outshine the new incoming governors through attempt to run the state by proxies.”
