Coordinating Minister for the economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala
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The Federal Government will spend N591.76bn on the servicing of domestic and foreign debts in 2013.
Out of the sum, N543.38bn will go into domestic debt payments and N48.39bn on foreign debts.
Also, the Federal Government is to spend
N42.05bn in 2013 on the acquisition of security, defence and counter
terrorism equipment.
It plans to purchase two helicopters to beef up the Presidential Fleet and two naval offshore patrol ships in the coming year.
The equipment will be acquired through
the Office of the National Security Adviser, the Police, Army, Navy, Air
Force and the Defence Headquarters.
These are contained in the details
provided in the 2013 budget proposal submitted to the National Assembly
by President Goodluck Jonathan last week.
The increased cost of servicing debts reflects the nation’s rising debt stock, especially the domestic component.
In 2011, the total allocation for
serving both domestic and foreign debts stood at N517.07bn, but the
figure has been increasing over time. President Jonathan had expressed
dismay at the country’s growing domestic debt while presenting the
budget.
The Medium Term Expenditure Framework
2012–2014 that preceded the 2013 budget presentation showed that the
Federal Government would have to resort to the domestic debt market to
raise N633.85bn in 2013.
This shows that 76.01 per cent of the N833.85bn deficit in 2013 will be funded through borrowing from the domestic debt market.
Other sources of funds for the deficit
are N50bn to be obtained from signature bonus and N150bn from the
stabilisation fund/excess crude account.
The PUNCH had exclusively
reported that the Federal Government’s domestic debt burden rose by
N1.21trn between March 2011 and March 2012.
Given the size of the domestic debt, the government in the 2012 budget provided N511.98bn for the servicing of domestic debt.
The Debt Management Office reported that as at June 30, 2012, the nation’s domestic debt portfolio stood at $6.15trn.
Out of this, the Federal Government
Bonds contributed N3.71trn while Nigerian Treasury Bill accounted for
N2.08trn. Treasury Bond, on the other hand, accounted for N353.73bn.
Also, DMO reported that the nation’s
external debt stock stood at $6.04bn as at June 15, 2012. Multilateral
funding organisations such as the World Bank group and the Africa
Development Bank group accounted for the biggest chunk of this money at
82.02 per cent.
Bilateral and commercial loans accounted
for 9.69 per cent of the external debt stock while 8.28 per cent of the
external debt stock came from the International Capital Market.
DMO had in recent years had confirmed
the deepening of the domestic debt market. However, it said the
development would buoy private sector operators into issuing their own
debt instruments.
However, the move has been criticised as
chasing private sector operators from the debt market and raising
interest rate for them (private sector operators) because of the
attractiveness of government debt instruments.
Given the concern that has been
expressed by top government officials on the growing domestic debt, the
Federal Government would likely move away from the domestic debt market
and increase its activities in the international debt market in the days
ahead.
The budget figures also show that the
office of National Security Adviser intends to spend N22bn out of total
annual allocation of N25.43bn on the procurement of security and
counter terrorism equipment.
They include satellite communication,
data signal equipment, iridium communication platform, motorised
direction finders, cyber security and counter terrorism equipment.
The Police Force and its formations has
an allocation of N3.144bn to procure security equipment ranging from
arms and ammunition to riot control equipment and bullet proof vests.
At the Defence Headquarters, a total of
N624.1m would be expended on the procurement of security equipment,
including radio scanners, tracking equipment and inter-connectivity of
different formations.
For the Nigerian Army, a total of
N1.85bn was earmarked for the purchase of defence equipment, which
include ammunition of various types.
Although the Nigerian Navy would be
spending N409.4m on defence equipment, it was allocated N10.019bn to
purchase two patrol ships.
Also, the Presidential Air Fleet is
expected to acquire two VIP Helicopters, for which a deposit of N1.129bn
was provided for in the budget. It is also expected to receive N370m
for the payment of the balance for the construction of a new hangar.
Our correspondent reports that the
equipment listed for purchase by the Office of the National Security
Adviser, were listed for acquisition in the 2012 Appropriation Act,
although the office received 28.24bn in 2012, as against N22bn in the
2013 budget for security equipment.
Also the Police had a slight increase
for security equipment in the 2013 budget with a difference of N59m,
while the Defence Headquarters had no provision in 2012.
The Army also boasts a substantial
increase in its defence and security equipment vote, having received
N1.02bn this year, with a difference of N83m.
In August 2010, the Federal Government
approved the purchase of three new presidential jets -two Falcon 7X
aircraft from France’s Dassault Aviation and one Gulfstream G550 from
the United States at a cost of $150m. The decision attracted criticisms
from many Nigerians who argued that there were already too many aircraft
in the Presidential Fleet.
Before then,former President Olusegun
Obasanjo, who earlier in his administration purchased two jets – a
Boeing Business Jet and a Gulfstream G550 – had said the presidential
fleet was too large. He sold off some of the jets.
