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Nigeria is not broke able to service debts on schedule, to settle 13% derivation arrears in 60 months—FG

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3 years ago

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Federal government has said that Nigeria is not broke. As a result of its conviction that the economy is on the right path, the government boasted that it was not contemplating debt restructuring or seeking debt relief as it is still capable of meeting its debt payment commitments as and when due. Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, said this at a news conference in Abuja while presenting the scorecard of the Buhari administration in the finance sector from 2015 to 2022. Ahmed pointed out that thought he country does not generate enough revenue to meet its obligations in all sectors of the economy due to continued oil theft in the Niger Delta, the rising revenue from non-oil sector has been effectively and judiciously managed to sustain the economy.

According to her, Nigeria does not need to either restructure its debt or seek for debt relief given the fact that it is following its debt management strategy closely at all times. Zainab said, “we do not have to restructure because we have a debt strategy we are following closely. We make provision for debt servicing in our budget as a first line charge so that we do not default in any loan settlement be it external or local. And we have projections in meeting our loans settlements in the short and medium terms. This is the medium plan and it is frequently revised. So we are comfortable in terms of our ability to pay our debts. We have no fears about what is happening. So we are not going for any debt relief and we are not going for any debt restructuring. We continue to generate revenue on a monthly basis and these revenues are distributed at FAAC. Again, to continue with the tradition of transparency we actually disclose how much is distributed on a monthly basis to the various tiers of government. We have witnessed a significant increase in non-oil revenue. While oil revenue is underperforming because of criminality, the NNPC has reported that the criminality has been curtailed and we are already beginning to see the pick-up in the production volumes which is that more revenue has begun to come to the Federation Account.

“But it is not enough to cover all we need and that is why in the budget we make room for deficit. Our borrowings have been practical. They are sustainable and are guarded by debt management strategies. The debt management is being followed religiously. Our debt is sustainable: 33% to GDP. We are still the lowest in terms of debt to GDP. But again, I say we do have a revenue problem despite the increase in revenue because our performance of eight percent of GDP, the revenue outturn is not enough. We are a population of 200million people. We have a lot of demand on government both states and federal to provide service. But our consumption level is low so we have to keep working to find out how we can incentivise and enhance the business environment so that small business enterprises that should be largest employer of labour and should be the largest contributors to GDP, can continue to grow. It is for that reason that we have reduced income taxes for the smallest businesses. And also reduce the taxes for medium businesses from 30% to 22% so that they can generate reasonable revenues to stabilise their businesses,” the finance minister explained.

On capital budget release in the 2022 budget, the minister announced that the sum of N1.7 trillion had so far been released out of the N2.7 trillion earmarked for capital project this year. On the payment of the arrears of 13% derivation to oil-bearing states in the country, the minister confirmed a report by one of the governors that the payment had indeed begun in earnest and that it would be completed within a 60-month window as mutually agreed between the federal government and the benefiting states due to financial constraints. The minister further said, “these releases are not just starting now. In my report you saw that it occurred in several periods but the recent one we negotiated to disburse it over 60 months’ period and we just started that about two months ago. So, basically the governor was not sharing information on the recent one. But there are some that have been disbursed and concluded.

“We took the pain to negotiate 60 months because of the tariff fiscal rate. So the disbursement is from the savings of the federation account. We did that to ensure that other tiers of the government do not suffer when we pay the arrears from the Federation Account,” the minister explained. The Minister of Information, Alhaji Lai Mohammed, who coordinated the press briefing, praised the Buhari government for its support to states to bail them out of serious economic hardship since coming to power. He boasted that no administration had been more magnanimous to states than the Buhari administration since the return to democratic rule and should he applauded for that.

Mohammed said: “I make bold to say that no Administration, since the beginning of the current political dispensation in 1999, has done more than the Buhari Administration in supporting states with all sorts of financial interventions. “When the Administration assumed office in 2015, at least 27 states could not pay salaries. Imagine what would have happened if Mr. President had not offered a helping hand, without discrimination, to the states? But for Mr. President, most of the states would have been plunged into serious socio-economic crisis, with dire consequences for the country. Please note that the support to the states came at a time when national resources had dwindled drastically, and also at a time of competing needs in many areas, including infrastructure, security, global pandemic, etc.,” Mohammed boasted.

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Economy

Nigeria champions African-Arab trade to boost agribusiness, industrial growth

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2 days ago

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December 5, 2025

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The Arab Africa Trade Bridges (AATB) Program and the Federal Republic of Nigeria formalized a partnership with the signing of the AATB Membership Agreement, officially welcoming Nigeria as the Program’s newest member country. The signing ceremony took place in Abuja on the sidelines of the 5th AATB Board of Governors Meeting, hosted by the Federal Government of Nigeria.

The Membership Agreement was signed by Eng. Adeeb Y. Al Aama, the CEO of the International Islamic Trade Finance Corporation (ITFC) and AATB Program Secretary General, and H.E. Mr. Wale Edun, Minister of Finance and Coordinating Minister of the Economy, Federal Republic of Nigeria. The Agreement will provide a strategic and operational framework to support Nigeria’s efforts in trade competitiveness, promote export diversification, strengthen priority value chains, and advance capacity-building efforts in line with national development priorities. Areas of collaboration will include trade promotion, agribusiness modernization, SME development, businessmen missions, trade facilitation, logistics efficiency, and digital trade readiness.

The Honourable Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, called for deeper trade collaboration between African and Arab nations, stressing the importance of value-added Agribusiness and industrial partnerships for regional growth. Speaking in Abuja at the Agribusiness Matchmaking Forum ahead of the AATB Board of Governors Meeting, the Minister said the shifting global economy makes it essential for African and Arab nations to rely more on regional cooperation, investment and shared markets.

He highlighted projections showing Arab-Africa trade could grow by more than US$37 billion in the next three years and urged partners to prioritize value addition rather than raw commodity exports. He noted that Nigeria’s growing industrial base and upcoming National Single Window reforms will support efficiency, investment and private-sector expansion.

“This is a moment to turn opportunity into action”, he said. “By working together, we can build stronger value chains, create jobs and support prosperity across our regions”, Edun emphasized. “As African and Arab nations embark on this journey of deeper trade collaboration, the potential for growth and development is vast. With a shared vision and commitment to value-added partnerships, we can unlock new opportunities, drive economic growth, and create a brighter future for our people.”

Speaking during the event, Eng. Adeeb Y. Al Aama, Chief Executive Officer of ITFC and Secretary General of the AATB Program, stated: “We are pleased to welcome Nigeria to be part of the AATB Program. Nigeria stands as one of Africa’s most dynamic and resilient economies in Africa, with a rapidly expanding private sector and strong potential across agribusiness, energy, manufacturing, and digital industries. Through this Membership Agreement, we look forward to collaborating closely with Nigerian institutions to strengthen value chains, expand regional market access, enhance trade finance and investment opportunities, and support the country’s development priorities.”

The signing of this Agreement underscores AATB’s continued engagement with African countries and its evolving portfolio of programs supporting trade and investment. In recent years, AATB has worked on initiatives across agribusiness, textiles, logistics, digital trade, export readiness under the AfCFTA framework, and other regional initiatives such as the Common African Agro-Parks (CAAPs) Programme.

With Nigeria’s accession, the AATB Program extends it’s presence in the region and adds a key partner working toward advancing trade-led development and fostering inclusive economic growth.

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Economy

FEC approves 2026–2028 MTEF, projects N34.33trn revenue 

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2 days ago

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December 4, 2025

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Federal Executive Council (FEC) has approved the 2026–2028 Medium-Term Expenditure Framework (MTEF), a key fiscal document that outlines Nigeria’s revenue expectations, macroeconomic assumptions, and spending priorities for the next three years. The approval followed Wednesday’s FEC meeting presided over by President Bola Tinubu at the State House, Abuja. The Minister of Budget and Economic Planning, Senator Atiku Bagudu made this known after the meeting.

The Minister said the Federal Government is projecting a total revenue inflow of N34.33 trillion in 2026, including N4.98 trillion expected from government-owned enterprises. Bagudu said that the projected revenue is N6.55 trillion lower than earlier estimates, adding that federal allocations are expected to drop by about N9.4 trillion, representing a 16% decline compared to the 2025 budget.

He said that statutory transfers are expected to amount to about N3 trillion within the same fiscal year. On macroeconomic assumptions, FEC adopted an oil production benchmark of 2.6 million barrels per day (mbpd) for 2026, although a more conservative 1.8 mbpd will be used for budgeting purposes. An oil price benchmark of $64 per barrel and an exchange rate of N1,512 per dollar were also approved.

Bagudu said the exchange rate assumption reflects projections tied to economic and political developments ahead of the 2027 general elections. He said the exchange rate assumption took into account the fiscal outlook ahead of the 2027 general elections.

The minister said that all the parameters were based on macroeconomic analysis by the Budget Office and other relevant agencies. Bagudu said FEC also reviewed comments from cabinet members before approving the Medium-Term Fiscal Expenditure Ceiling (MFTEC), which sets expenditure limits. Earlier, the Senate approved the external borrowing plan of $21.5 billion presented by President Tinubu for consideration The loans, according to the Senate, were part of the MTEF and Fiscal Strategy Paper (FSP) for the 2025 budget.

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Economy

CBN hikes interest on treasury Bills above inflation rate

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2 days ago

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December 4, 2025

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The spot rate on Nigerian Treasury bills has been increased by 146 basis points by the Central Bank of Nigeria (CBN) following tight subscription levels at the main auction on Wednesday. The spot rate on Treasury bills with one-year maturity has now surpassed Nigeria’s 16.05% inflation by 145 basis points following a recent decision to keep the policy rate at 27%. 

The Apex Bank came to the primary market with N700 billion Treasury bills offer size across standard tenors, including 91-day, 182-day and 364 day maturities. Details from the auction results showed that demand settled slightly above the total offers as investors began to seek higher returns on naira assets despite disinflation.

Total subscription came in at about N775 billion versus N700 billion offers floated at the main auction. The results showed rising appetite for duration as investors parked about 90% of their bids on Nigerian Treasury bills with 364 days maturity. The CBN opened N100 billion worth of 91 days bills for subscription, but the offer received underwhelming bids totalling N44.17 billion.

The CBN allotted N42.80 billion for the short-term instrument at the spot rate of 15.30%, the same as the previous auction. Total demand for 182 days Nigerian Treasury bills settled at N33.38 billion as against N150 billion that the authority pushed out for subscription. The CBN raised N30.36 billion from 182 days bills allotted to investors at the spot rate of 15.50%, the same as the previous auction.

Investors staked N697.29 billion on N450 billion in 364-day Treasury bills that was offered for subscription. The CBN raised N636.46 billion from the longest tenor at the spot rate of 17.50%, up from 16.04% at the previous auction.

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