Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, yesterday, said the Bola Tinubu-led administration has revamped Nigeria’s economy.
Edun made the submission while speaking to reporters at State House, Abuja, after the Federal Executive Council (FEC) meeting chaired by President Tinubu.
Edun explained the worrisome indices that had beclouded the true state of the economy and said the administration had straightened out practices that had hitherto burdened the economy.
According to him, the country’s total debt stock in US dollar terms decreased by 15 per cent in the first quarter (Q1) of 2024, a development he described as “very positive”.
He, however, pointed out that when factoring in exchange rate movements and domestic debt issuance, the total debt stock in naira terms, increased by 25 per cent.
Edun stressed that the government’s revenue collection mechanism had been robust due to technology-driven initiatives, adding that expenditure controls are also being implemented.
He stated that the federal government had not relied on Ways and Means advances to fund its operations, a departure from past practices.
The minister highlighted that the current administration inherited a legacy of N22.7 trillion in outstanding Ways and Means, which were being audited and securitised.
He further explained that despite this, the current Ways and Means deficit stood at N3.4 trillion, which was offset by operating surpluses from revenue-generating agencies.
His words: “I gave the council a verbal briefing that I’m giving now, and I will start by saying that when we interrogate the figures over the first quarter of this year, starting end of December and end of March, if we want to be positive, all we will say is that the glass is half full.
“We are halfway there. If not, we can be negative and try and say the glass is half empty.
“Why do I say this? The debt stock, the total debt stock of Nigeria in US dollar terms fell by 15 per cent. That is very positive, any rating agency, any creditor, any investor looking at that will see it as a positive move.
“We’re a country that has petro-dollars. We have ability to earn in dollars. So it’s highly relevant that we look at what is our exposure in dollar terms.
On the other hand, given the exchange rate movements, even though there was like an N8 trillion increase in actual debt issuance, the total debt stock, when you count domestic debt, which, as I said, there was increase in issuance. When you count the total external debt and domestic debt in naira terms, it has increased by 25 per cent.
“That’s mainly due to the foreign exchange movement, which can change tomorrow, as we know. Linked to that is the all-important question of the government’s capacity to pay its way, debt.”
Edun maintained, “Credit is all about the revenue to service and, of course, to use those funds properly, judiciously, accountably and in a way that gives positive returns.
“I can say quite categorically that under President Bola Tinubu, the federal government does not rely on Ways and Means in order to fund itself. At no time have we gone to Mr. President and requested permission to seek funding from the central bank to pay anybody, be it external debt service, be it share capital cash calls, or any other of the liabilities that the government has.
“As with all agencies, we are focused on ensuring that the revenue that is due to the federal government is collected robustly, using technology, avoiding the blockages, which manual processing can cause, and it has led to a very robust revenue effort and likewise, we are implementing expenditure controls, also very ably empowered by technology.
“So within that context, what we have is that we had a legacy. Mr. President inherited a legacy of N22.7 trillion in outstanding Ways and Means, which have been securitised on the eve of the entry of President Tinubu’s administration.
“Naturally, we are auditing, we’re doing a forensic audit and interrogating that figure, because it’s a liability which we have to pay interest on…But as a matter of fact, the current Ways and Means deficit is N3.4 trillion.”
