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Tag: debts

  • Alleged debts: Ex-Governor Shema accuses Masari of falsehood, character assassination

    Alleged debts: Ex-Governor Shema accuses Masari of falsehood, character assassination

    • Writes Buhari to caution Katsina Governor

    Immediate past Katsina State Governor Ibrahim Shema has described as deliberate falsehood, allegations of misappropriation of funds and huge debt profile levelled against his administration by Governor Aminu Masari.

    Shema, in a 13-page petition addressed to President Muhammadu Buhari written on his behalf by the law firm of Chief Wole Olanipekun (SAN), decried what it called the unexpected campaign of calumny waged against him by Masari.

    Titled: “Deliberate blackmail, denigration, vilification and persecution of Dr. Ibrahim Shehu Shema, the immediate past Governor of Katsina State by the Governor Aminu Bello Masari-led administration – appeal for caution,” the petition described the allegations as untrue and unconscionable attempt to sully the locally and globally applauded developmental strides of Shema’s tenure as well as dent his image.

    The letter, according to the law firm has become necessary, giving that operatives of the Economic and Financial Crimes Commission (EFCC) have started hounding the former governor’s appointees, without any charge or accusation, and without information on who their accusers were.

    Urging Buhari to call the Masari-led administration to order, it said that heavy propaganda was being mounted against Shema by the present administration through the state owned media, portraying him and his government as treacherous.

    On the alleged N42 billion debt incurred by his administration, Shema said no loan, whether internal or external, private or public, local or foreign, was applied for, collected, received or in any way obtained for Katsina state.

    He denied owing local government workers N6.2billion gratuity, adding that the local governments were incharge of payment of salaries and gratuities of their workers.

    The petition reads: “In appreciation of and respect for the constitutionally created tiers of government, local governments were in charge of payment of salaries and gratuities to their workers. Hence, the alleged N6.2billion gratuity, which is obviously fabricated, cannot in any way or under any guise be tagged or branded ‘a state debt’. It is also untrue that a sum of N3.1billion or any other sum was owed in gratuities to retired civil servants/workers as at the end of the tenure of our client.

    “Particularly, in response to the contrived allegation on the foreign debt portfolio of $78million USD, our client categorically posits that this figure represents an accumulation of facilities taken and facilitated by previous administrations in the state, starting from the military era; and not a single dollar of it was incurred, borrowed or obtained by the administration led by our client…some predate the inception of Katsina State in 1985, and others dating as far back to 1965-about two decades before the creation of Katsina State.

    “It is therefore, mind-boggling and preposterous that the Masari administration would make such unfounded allegations, despite the well documented report and details furnished it upon inauguration.

    “For the avoidance of doubt and at the risk of repetition, be it noted that not one cent of the said loan was incurred during our client’s tenure as Governor.

    “What is more? The Federal Government, right from time, makes the necessary deductions from the monthly statutory allocations due to Katsina State, in order to settle this foreign debt portfolio.

    “These monthly deductions, at some point, were as much as N72 million every month. As a result, the Ibrahim Shema led-administration appointed an external auditor to audit all the payments made and the actual state of the alleged debt.

    “The external consultant, in its preliminary report, stated that not only had the debt been completely defrayed, the state had probably overpaid and was entitled to some refund.

    “In his handover note, our client further advised the present administration to conduct a more comprehensive evaluation into the repayment of the loan and pursue a refund of the probable excess payment.

    “All the above were intentionally left out of the report of the transition committee. Our client challenges the Masari administr?ation to make public, any foreign loan taken by his administration, as well as the date, the creditor (foreign bank), amount, and the purpose for which the purported loan was obtained.

    “Our moneys disbursed by or through the Ministry of Finance throughout our client’s administration were carefully documented and the said documents were supplied to the present administration.

    “It is therefore, strange and mischievous to say the least, that the transition committee alleged that a sum of N13billion is unaccounted for by/at the Ministry of Finance, without supporting the said accusation documentarily, factually and without founding same on any logical or analytical ground.

    “This mischievous allegation totters the imagination and begs the following questions, to wit, how would the sum of N13 billion ‘disappear’ from a ministry in Katsina State when the same government admits that the amount left in the coffers of the state by the Ibrahim Shema led administration is in excess of N4 billion as at May?

    “How would anyone allege that such an amount is unaccounted for when it is on record that Katsina State was|is the only state in Nigeria that fully paid the salaries of civil servants and did not owe any arrears in salaries as at May 29?

    “We invite Mr. President to note that this outstanding performer and very prudent administrator (our client), settled May, 2015 salaries before leaving office. How could such an amount of money be said to be ‘misappropriated’, when the Ibrahim Shema-led administration constructed a 35 thousand capacity stadium?

    “Barring any ominous underpinning, a cursory look at the books of the Ministry and all rhe documents revealed that there were no misappropriated funds and all funds were disbursed by the Ministry of Finance, and more, were used for the enviable projects executed by the state during our client’s tenure,” the letter stated.

    It confirmed the transfer of N7 billion to ALGON account, noting that it was done in compliance with the allocation procedures of the state.

    “The said sum is designated for the payment of salaries of members of the staff of 34 Local Government Areas of Katsina State, and applied in respect of the joint projects by the local government areas (LGAs).

    “While the LGAs exercised immense autonomy in the use of this fund, our client ensured that same was dispensed and/or used and applied shrewdly and prudently.

    “Again, it is untrue that the SUBEB fund was misappropriated. Using the mildest of terms, this allegation is nauseating. All funds which have been allocated to Katsina State SUBEB have been appropriately and judiciously appropriated.

    “At this point, it is important to mention that throughout our client’s eight-year tenure, he set up a free education programme for the entire Katsina State.

    “Little wonder, the state was annually adjudged as the best performer by the Universal Basic Education Board (UBEB)…

    ‘As regards the heinous allegations of N7,100,000,000 SURE-P fund, our client states that this is totally false and baseless. The disbursement of the SURE-P fund in Katsina is budgetarily provided for, and duly expended in strict compliance with the provisions of the state’s Appropriation Law.

    “All expenditures were duly tabled at the floor of the State House of Assembly and duly approved. The import of this is that the disbursements, allocations, and/or usage of the said funds are well documented.

  • N600b debts may kill construction industry

    The Nigeria Labour  Congress (NLC) has  expressed concern over the N600billion debts being owed the construction industry by the three tiers of government.

    The workers said if the debts were not settled urgently, the sector might go into extinction.

    Factional President of the group, Comrade Ayuba Wabba, said this had made it  difficult for the companies to pay salaries, adding that mass retrenchment was imminent.

    He said the situation had caused delays in delivery of construction jobs across the federation and has, ultimately, put the industry in a  bad shape to the extent that  companies were being forced to sack due to their inability to cater for their workers.

    Wabba said the sector was working at 30 per cent capacity, following the mass retrenchment due to the delay and non-payment of certified jobs by the government.

    He said: “The construction industry, for instance, is owed by all the three tiers of government over N600 billion. How will the industry survive if after delivering services they don’t get paid? How will workers salaries be paid as at when due if employers don’t get paid for their services?

    “The sector is not finding it easy; the bigger ones and smaller ones are finding it extremely difficult. In the construction industry, they are working below 30 per cent capacity.”

    He said it was distressing to observe that many firms were just going to work for the sake of continuity as many of them were on the verge of collapse due to huge debts owed by the federal, states and local governments.

    “Some of them have closed shops. Some of them only go to office for the purpose of continuity. We wish to bring to the notice of President Muhammadu Buhari; the Senate and House of Representatives that the construction companies are working at 30 per cent capacity following the mass retrenchment of  workers due to the delay/non-payment of certified jobs by various arms of government.”

    He urged the Federal Government to put genuine efforts in place to revitalise the economy which he said had witnessed artificial growth.

    Wabba said corruption was at the centre of Nigeria’s problem, urged the government to take steps to bring down corruption and reduce waste in the system.

    He called on the government to priorities the welfare of workers who he said are suffering from poor remuneration and uncertainty in the workplace.

     

  • Bad debts: Bankers’ Committee says Ecobank’s bahaviour is unethical

    •Rules in favour of Honeywell 

    The sub-committee on ethics and professionalism of the Bankers’ Committee has ruled that the agreement between Honeywell Group and Ecobank to pay N3.5 billion as full and final payment of the borrowers’ indebtedness is valid and should be complied with.

    The Committee which submitted its report to the Bankers’ Committee on the 2nd of June this year, said it found after investigations that the transaction involved a legacy (Oceanic Bank Ltd) and living bank Ecobank, and that the bank did not go through its Board for approval on the concession granted to Honeywell Group.

    According to the Committee’s findings, N3.5 billion paid by Honeywell Group was in line with the agreement reached by the two parties on 22nd July, 2013 and that Ecobank’s behaviour was “considered as unethical”.

    It was revealed that “based on the legal opinion and clarification sought from the Banking Supervision Department of the Central Bank of Nigeria (CBN), Chairman of Honeywell Group was not a ‘related party’ to the transactions as he was not a member of the board of Directors of Oceanic Bank at the time the transactions were consummated”.

    The Committee noted: “As at the time Ecobank Nigeria  acquired Oceanic Bank  and by implication the Honeywell Group’s loan facility, and commencement of discussions with Ecobank, the chairman, had left the Board of Ecobank Transnational Incorporated (ETI) as a Director.”

    In its defense before the Committee, Ecobank said it “was not attempting to renege on any agreement” because, “Honeywell Group did not meet the terms of the in-principle agreement”.

    Ecobank said at the meeting of July 22, 2013, there was an in-principle agreement/understanding for the payment of N3.5 billion, the initial payment was to be an immediate good faith payment of N500 million, while the balance of N3 billion was to be paid within two weeks of July 22, 2013 before the CBN examiners in the bank concluded their examinations and subject to the approval of its Board of Directors.

    The bank said its letter of July 22, 2013 reiterated the need for the in-principle proposed concessionary payment to be made before the conclusion of the CBN examination. As the examiners were at the point of concluding the examination, the bank projected that the payment of the sum of N3.5 billion on the three accounts within the two weeks might prevent the threatened downgrade.

    Although Honeywell Group made a payment of N500 million on July 25, 2013, the company did not pay the balance of N3 billion before the CBN examiners left the bank, adding that “the issue of calling or writing to establish the timeline was not necessary as it was confirmed in the bank’s letter of July 22, 2013.”

    Ecobank added that “the in-principle understanding of July 22, 2013 could not have been reiterated in December 2013, long after the CBN examiners had left the bank as it no longer existed since the fundamental conditions were not met, and that the completion of payment of N3.5 billion on January 30, 2014 was uneventful as it occurred long after the timeline and therefore was not considered as full and final settlement of the debt.”

    Ecobank said it duly acknowledged the cumulative payment of N3.5 billion in a letter dated February 2014, but never committed to issuing letter of discharge of the debt, or the removal of the debt from the Credit Bureau because the in-principle proposed concessionary payment had lapsed and was no longer in effect.

    The bank also added that it’s letter of November 14,, 2014 was a response to the letter of Honeywell dated September 01, 2104, reiterating the position of the Board of Directors of the bank on the Honeywell Group’s request for the proposed concession. Noting that “prior to the letter, the chairman of Honeywell Group had several discussions with management of the bank at which the management of the bank reiterated that the in-principle concessionary payment had lapsed.”

    It was equally stated that “the delay of Honeywell Group in taking advantage of the in-principle proposed concession and the timeline for same, led to the intervention of the CBN and its directives to the bank to recover the total outstanding amount. The CBN and NDIC had in their risk based supervisory report on the bank as at June 30, 2014, directed the bank as follows: facilities amounting to N5.3 billion owed to the defunct Oceanic bank by companies relating to Oba Otudeko, an ex director of Ecobank Transnational Incorporated (ETI) had not been fully paid. Only N3.5 billion had been paid thereby leaving a balance of N1.8 billion despite the following facts:

    . The customer has ability to pay

    . The agreed date of settlement had lapsed

    . The customer was an ex-director of ETI which is the parent company of Econbank Nigeria Limittd i.e., an insider whose facility can only be written off with the approval of the CBN, which has not been obtained and that  the customer is the current Chairman of FBN Holdings Plc.

    Based on these facts according to Ecobank, it’s “management was required to ensure that the obligor pays up the outstanding balance of N1.8 billion and forward an update to the Director BSD, CBN and Director BED NDIC, within 30 days of the receipt of this report.”

    Ecobank argued that the balance outstanding on the three accounts as at March 31, 2015 are: Anchorage Leisure N805,223,592.03; Siloam Global N2,812,361,174.69 and Honeywell Flour Mills N217,625,148.77

    Details of the debt revealed that Anchorage Leisure received a N450 million project facility granted it in 2006. The facility was used to fund the construction of the Raddison Blu Anchorage Hotel. Unfortunately, the project experienced significant delays due to factors which were out of  control of the management during the construction period and this led to considerable cost overruns. This became a heavy burden on the capital structure of the project and hampered the ability of the project to payback the capital taken.

    Secondly, Honeywell Flour Mills was in September 2008 granted a margin facility by Oceanic Bank to the tune of N9.3 billion. Following an agreement between the parties in March 2010, the underlying assets were disposed and the proceeds applied towards the facility. The balance of N2.5 billion was rescheduled after a bullet payment of N6 billion had been made by Honeywell into the account.

    Finally, Siloam Global Limited’s indebtedness was an underwriting commitment for the sum of N2.56 billion which was converted into loan in December, 2011, in line with a put option agreed between Oceanic Bank and Honeywell Flour Mills Plc. However, as a result of general downturn in the capital market, the underlying assets suffered significant diminution in value.

    In 2012, Honeywell commenced discussions with Ecobank with a view to agreeing to a full and final settlement of the indebtedness of three of its operating companies mentioned above.

     

     

  • Industrialist allays fears over national debts

    An industrialist and Chief Executive Officer,  JKN Limited, Chief John Odeyemi, has said there is nothing to fear over borrowing by the government so long as the money borrowed is used for developmental and economically viable projecs with lasting socio-economic benefits for the country.

    Odeyemi, who is also the Chairman, JAO Investment Company Limited, said rather than lose sleep over this, Nigerians should be more concerned about the viability of projects than the debt incurred in bringing the project into being.

    He argued that there are several lending institutions that will lend Nigeria over $100 billion if they are convinced of the economic viability and benefits of projects the money will be invested in.

    He said: “Development is not only about the size of debt  a government is owing; the most important thing is for the borrowed money to be put into good use for the benefit of the greater majority and not fritted away into private pockets.

    “It is acceptable to borrow as long as what you are doing is viable, acceptable and beneficial to the people.

    “The economic benefit must outweigh the cost of borrowing; if development is right, the proceed will bring social and economic benefit to the people.”

    Odeyemi contended that the leadership of the country knows what is required to be done to move the country forward.  For him, Nigerians have never lacked ideas but implementation of such ideas is the problem, and until there is the will to implement lofty ideas and programmes, the nation may just continue to run round in circles.

  • Nigeria, others’ debts to hit $393b

    Standard & Poor’s Ratings Services (S& P) said the sovereign commercial and concessional debts of Nigeria and 17 other sub-Saharan African (SSA) countries under its rating services will reach about $393 billion by the end of this year.

    The global rating agency indicated that Nigeria, Ghana, South Africa and 15 other SSA countries will borrow an equivalent of $56 billion from long-term commercial sources in 2015. About $44 billion of the total commercial borrowing are expected to be raised in local currency. About 29 per cent, equivalent to $17 billion, of the sovereigns’ gross borrowing are expected to be used to refinance maturing tong-term debts.

    The new commercial borrowings are expected to push sovereign commercial debts by the SSA countries to $298 billion by the end of this year. With this, the total commercial and concessional debt stocks are expected to rise to $393 billion by the end of 2015, a year-on-year increase of seven per cent or $24 billion.

    In its Sub-Saharan African Sovereign Debt Report 2015 obtained at the weekend, S & P indicated that Nigeria and Ghana will face the highest debt rollover ratios within the group, with both countries expected to reach 31 per cent.  Angola’s ratio is expected to stand at 22 per cent.

    According to the report, where borrowings from official lenders are included, the overall long-term borrowings this year will be $70 billion, $5 billion below $75 billion recorded last year. Non-commercial official debt-bilateral and multilateral is expected to reach $95 billion, representing 24 per cent of total debt by the end of this year as against 25 per cent last year.

    The report was anchored by S & P’s credit analyst, Ravi Bhatia and included estimates on debt issued by a central government in its own name and exclude local government and social security debt, as well as debt issued by other public bodies and government-guaranteed obligations. In terms of commercial debt instruments, the estimates for long-term borrowing included bonds with maturities of more than one year issued either on publicly listed markets or sold as private placements, as well as commercial bank loans.

    “Although South Africa is consistently the largest commercial borrower and has the highest net new borrowing requirement in out sample in 2015, Nigeria and Angola’s average debt maturity is much shorter and hence their rollover ratio is higher—than South Africa’s. This leads to our projection of relatively high gross long-term issuance needs in 2015 for Nigeria and Angola, equivalent to $11 billion and $13 billion respectively,” the report stated.

    The Nation noted that Nigeria allocated about N954 billion or 21 per cent of its budget this year for debt servicing. About 94 per cent of the of the allocation or N894.6 billion will be used to service domestic debt while N59 billion will be used to service foreign debts.

    The Debt Management Office (DMO), which oversees Nigeria’s sovereign bond issues, indicated that Nigeria’s public debt stock stood at N12.06 trillion by March 31 this year. Nigeria’s sovereign domestic debts have risen consistently over the years to peak at N8.51 trillion by March 31 this year. Sovereign domestic debts rose from N5.623 trillion in 2011 to N6.538 trillion in 2012 and subsequently to N7.12 trillion and N7.90 trillion in 2013 and 2014 respectively.

    tHE government had indicated recently that it intended to shift focus to multilateral and bilateral agencies as it struggles to bridge budget deficit amidst declining incomes.

     

  • Buhari to inherit N8.1b Presidential Villa debts

    Buhari to inherit N8.1b Presidential Villa debts

    Sambo Committee to submit report today

    When President-elect Muhammau Buhari moves into the State House after the May 29 handover, he will be confronted with N8.185,575,211.50 debts.

    President Goodluck Jonathan will on May 28 conduct Buhari round the Villa – the seat of power in Abuja where facilities are said to be ageing.

    About N3,647,793, 305.76 is needed to fix the infrastructure at the Villa.

    These highlights are contained in a report submitted to the Federal Government Transition Committee, which is headed by Vice President Namadi Sambo.

    The committee is expected to submit its report today to the Ahmed Joda-led APC Transition Committee.

    The liabilities include contracts/service providers (N1,234,913,628.92), staff claims (N1,238,876,080.16), local  contracts commitments and liabilities, including Julius Berger Nigeria (N6, 946,699, 131.34).

    The report said: “The President had on December 3 last year approved the release of N3,394,168,460.95 for the payment of recurrent/overhead debts and capital debts due to other contractors, consultants and service providers. This is yet to be released by the Federal Ministry of Finance, it said.

    President Jonathan, according to the report, on April 15 directed the Coordinating Minister for the Economy/Minister of Finance, Dr Ngozi Okonjo-Iweala, to look into the State House appeal for the release of at least N4billion to make part-payments out of the total outstanding debts of N8,185,575,2111.50 “to sustain the existing mutual and cordial relationships with the owed firms. This is still being awaited”.

    The report said the N8.1b liabilities are outside the expenses on the renovation of the Defence House, the main residence/ president’s office, Aguda House/ Vice President’s office and other guest houses under the transition programme.

    “The bills for these transition programme works are yet to be received and will be additional  to the 2015 annual Service Level Agreement for the State House Facilities with an annual average commitment of N3,531,793,631.77 certified for 2014,” the report added.

    Facilities at the State House have started aging and the budgetary provision increasingly becoming inadequate.

    The report said: “The primary challenge facing the State House has been the inadequacy of successive budgetary appropriations. The State House annual appropriations do not match its actual activities, thereby leading to regular recourse to additional funding from Intervention Fund from the Federal  Ministry of Finance.

    “About 283 of the temporary staff not found eligible for regularisation were with the approval of His Excellency, the President given contract. appointments renewable annually based on performance and fitness.

    “ However, payment of their salaries(an average of N8million per month) is from State House overheads provision, which remains a huge challenge to State House.

    “The existing infrastructure for mechanical, electrical and associated components have aged and are performing well beyond their design lives.

    “The proposal for their replacement/ upgrade has been reviewed and certified by the Bureau of Public Procurement in the total sum of N3,647,793, 305.76. However due to paucity of funds, phased implementation is being adopted for the most vital and critical works, starting with Phase I in the sum of N693, 119,509.55

    “Inadequate office space to accommodate staff of the State House and inadequate operational vehicles for the efficient discharge of the activities of the various departments and units of the State House, including shuttle buses within the State House Complex and between the State House and the State House Medical Centre.”

  • Labour decries $9.38b foreign debts

    Labour decries $9.38b foreign debts

    The Trade Union Congress of Nigeria (TUC) has cautioned the Federal Government not to mortgage the country’s future through external borrowing.

    Its President, Comrade Bobboi Bala Kaigama, said the union was worried over the country’s huge external debts, which are $9.38 billion.

    He said in 2005 under the regime of former President Olusegun Obasanjo, Nigerians celebrated the nation’s exit from external debt, adding that it was surprising that by December 2010, Nigeria external debt portfolio had risen to $4.78 billion.

    He said: “This is very sad. If the foreign debt regime  stands at $ 9.38 billion, it follows that external debt profile has risen by almost $5 billion which is about 100 per cent in less than four years.

    “This is very unfortunate especially when the impacts of the foreign loans are not being positively felt by the generality of Nigerians.

    “Nobody should be carried away by the argument that the country debt stock is still less than 26 per cent of GDP the so called international standard.

    Kaigama said the country went through hell when its debt stock was about $ 35 billion, stressing that the country was sliding back to where we were before 2005.

    He said though the Debt Management Office (DMO) said part of the loan was injected into the power sector, there was nothing on ground to show that electricity supply has improved greatly in the country.

    DMO’s Director-General, Dr Abraham Nwankwo, had said in Abuja that the country’s domestic and foreign debt had  hit $ 66 billion over (N10 trillion) with the external component being $9.38billion.

    Kigama warned that increasing reported cases of deserters in the Nigerian Army over lack of weapons to confront the Boko Haram insurgency is a dangerous trend that can destroy the army.

    He expressed concerns over incessant refusal by soldiers to take orders from their superiors in their fight against the Boko Haram when deployed to the stronghold of the terrorist sect.

  • Firms must pay their debts, says Otti

    Power firms must meet their debt obligations to banks or lose out, the Group Managing Director, Diamond Bank Plc, Dr Alex Otti has said.

    At a national discourse in Lagos, Otti said the firms were required to pay back debts owed the banks to sustain the relationship.

    He said: “In respect of the firms that bided and bought the assets of PHCN, loans given to them must be paid to ensure mutual growth. The story of power supply is all too familiar with current peak time generating capacity of about 4,517 megawatts when there is estimated latent demand of 19,000 to 20,000 megawatts.

    ‘’We will not mourn a lot about this, but will like to take the discourse to the direction of how our infrastructural deficit can be addressed in an accelerated manner.

    “Good enough, a step has been taken in the right direction with the establishment of a Sovereign Wealth Fund of $1billion and a clear mandate to invest part of the money in infrastructural development. We need to take an additional step to ensure sustainability of this initiative by ensuring that the funding mechanism is agreed upon by all parties – Federal, state, and local governments.’’

    He said privatisation is good, if it is done properly. Otti said the government invested a lot of money on Ajaokuta and Osogbo Steel Rolling Mills without achieving success. He said most banks engage in oil and gas transactions, without having knowledge of what it entails.

     

  • UNPAID DEBTS: Ex-Nasarawa Utd players, coaches drag club to Industrial Court

    UNPAID DEBTS: Ex-Nasarawa Utd players, coaches drag club to Industrial Court

    • Threaten to take case to FIFA

    Former players and coaches of Nasarawa United have taken the club to the Federal Industrial Court in Makurdi, Benue State for the Lafia’s sides failure to pay up the debts owed them for several seasons.

    The Federal Industrial Court is meant to settle disputes that arise between two individuals or body so that the cheated party can get back what had been denied.

    Making this known to SportingLife, an ex player of the club, Yahaya Garuba better known as Baba Alhaji said that all attempts for Nasarawa United to pay the debts of all those that have meritoriously served them in the past have fell deaf ears.

    He said what the club had only done was to selectively settle some prominent individuals whom the club top officials knew would use their influence and clout to worry them.

    Garuba noted that despite all his cries for justice, Nasarawa United have not deemed it proper to pay his debts and that of others, hence their resolve to go to the Industrial Court.

    He also added that they have started making consultations on how to draw the attention of FIFA to the issue if they do not get proper redress at the Federal Industrial Court in Makurdi.

    Garuba said that he was visibly disappointed in Nasarawa United that the club’s lawyer couldn’t even appear at the Industrial Court during the first sitting on December 2 despite adequately given notice of summons to come.

    He went ahead to add that he was still at a loss why Nasarawa United and some other clubs that are indebted to their players and coaches are still allowed to continue to play in the premier league when FIFA laws stipulate that debtors should be shown the way out.

    Garuba concluded that it would be bringing the law court into disrepute if Nasarawa United fail to appear during the second sitting on January 9th in Makurdi.

    It would be recalled that Garuba last season seized the official vehicle of Nasarawa United when the club came to Kastina Ala to play Lobi Stars. The club’s vehicle was only released after pleas from football stakeholders in Benue after the club promised to pay the affected players. The payment has not been forthcoming since then.

  • 36 states’, FCT’s debts hit N1.47tr

    The total domestic debt of the 36 states and the Federal Capital Territory (FCT) last year hit the N1.471 trillion, the Debt Management Office (DMO) have said.

    This is an increase of 19.34 per cent compared with the N1.233 trillion domestic debt figures the previous year.

    This is contained in this year’s report of the annual National Debt Sustainability analysis (DSA) by the DMO.

    According to the report, the “increase was attributable to accumulation of arrears and new issuance of bonds in the capital market by some state governments”.

    With the introduction of the DSA to the states, the DMO has a relatively accurate figure of what each state owes and there is increased transparency in the reporting mechanism by states.

    The report added that Federal Government’s outstanding securitised total domestic debts grew to N6.537 trillion as at the end of December last year compared with N5.622 trillion as at December 2011, indicating an increase of 16.27 per cent.

    Of this amount, “FGN bonds accounted for N4.080 trillion or 62.41 per cent, the NTBs was N2.122 trillion or 32.47 per cent, while Treasury Bonds accounted for the balance of N334.56 billion of 5.12 per cent”.

    The growth over the years, the DMO report said, “is attributed to rising governments’ expenditure due to increase in public wages bills, overheads and other recurrent expenditures, resulting to huge budget deficits which were required to be funded through domestic borrowing.”

    As a result, the total domestic debt service as at end of December last year stands at N720.549 billion, indicating an increase of 34.08 per cent over the level in 2011.

    The total domestic debt service as a percentage of the total domestic debt stock outstanding was 11.02 per cent in 2012, which was higher than the 9.56 per cent recorded in 2011.

    The significant rise in debt servicing in 2011 and last year, the DMO said, was “due to the increase in the cost of borrowing occasioned by the contractionary monetary policy regime, particularly the upward review of the benchmark Monetary Policy Rate (MPR) by the CBN in 2011 from 6.25 to 12 per cent, the MPR remained unchanged in 2012 at 12 per cent”.

    Last year, the total external debt service was put at $293 million, which was lower than the $351.61 million paid in 2011 by $58.61 million or 16.67 per cent.

    The decrease was because of the repayment of principal on multilateral creditors and non-Paris club commercial loans last year and full redemption of some World Bank/African Development Bank (AfDB) loans in 2011.

    On total public debt service (external and domestic debt service of the Federal Government and states), this rose to $5.550 billion, or 24.25 per cent last year from $4.467 billion the previous year.

    Of the total debt service last year, Federal Government and state domestic debt service accounted for 94.72 per cent, while the balance of 5.28 per cent went to external debt service.

    This, the DSA report, said “indicated a reduction in external debt servicing while that of the domestic debt increased significantly. The decrease in the external debt service was largely attributable to full redemption of some IBRD and AfDB loans over the years and the reliance on the domestic bond market to largely meet the Federal Government’s borrowing requirements since 2002”.

    Total external debt stock outstanding to the country, the DMO said, grew by $860.49 million or about 15.19 per cent last year over the $5.666 billion recorded the previous year.

    The growth was attributed, the report added, “to additional disbursements on existing loans and marginal net adverse cross exchange rate movements between the different currencies in the external loan portfolio”.

     

    The DMO noted that “trends in Nigeria’s external debt stock over the five year period ending 2012 showed a gradual increase with the highest annual increment of 24 per cent occurring in 2011 due to the issuance of the US$500 million Eurobond.”