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A New York Times article about Nigeria’s current economic situation has drawn a response from the federal government.
The article, titled ‘Nigeria Confronts Its Worst Economic Crisis in a Generation‘, talks about fuel subsidy removal and the floatation of Nigeria’s currency by the Bola Tinubu-led administration and their impacts on the population.
Rejoinder to New York Times’ Jaundiced Report on Nigeria’s Current Economic Situation pic.twitter.com/53Zd0PiCNe— Presidency Nigeria (@NGRPresident) June 17, 2024
In a widely-circulated rejoinder between Sunday and Monday, the State House, through Bayo Onanuga, Tinubu’s special adviser on information and strategy, described the article as a “jaundiced report” and claimed that the current economic crisis was a consequence of the bad economy the president inherited.
Onanuga further faulted the report, saying that the United States-based newspaper failed to consider the positive outcomes of Tinubu’s economic policies, reflected in the trade surplus and decreased inflation rate.
“The economy recorded a trade surplus of N6.52 trillion in Q1, as against a deficit of N1.4 trillion in Q4 of 2023. Portfolio investors have streamed in as long-term investors,” said Onanuga.
“The inflationary rate is slowing down, as shown in the figures released by the National Bureau of Statistics for April. Food inflation remains the biggest challenge, and the government is working very hard to rein it in with increased agricultural production.”
The president’s aide then claimed the 2023 appropriation act was inefficient as it proposed to spend 97 percent of the country’s revenues to service debt.
CLAIM: The 2023 budget planned to use 97 percent of Nigeria’s revenues to service debt.
“For decades, Nigeria had maintained a fuel subsidy regime that gulped $84.39 billion between 2005 and 2022 from the public treasury in a country with huge infrastructural deficits and in high need of better social services for its citizens,” the statement read in part.
“The state oil firm, NNPC, the sole importer, had amassed trillions of naira in debts for absorbing the unsustainable subsidy payments in its books. By the time President Tinubu took over the leadership of the country, there was no provision made for fuel subsidy payments in the national budget beyond June 2023.
“The budget itself had a striking feature: it planned to spend 97 percent of revenue servicing debt, with little left for recurrent or capital expenditure. The previous government had resorted to massive borrowing to cover such costs.”
VERIFICATION: In verifying this claim, aso.rocks investigates compared the claim with available public records and reports.
In 2023, the country was projected to generate N8.46 trillion in revenue and spend N6.31 trillion in servicing public debt. This represented a debt-servicing ratio of 73.5 percent, according to the Debt Management Office (DMO). The DMO coordinates the management of Nigeria’s debt.
Furthermore, the country was expected to raise N10.49 trillion in revenues and N11.34 trillion in deficit, which was to be financed by borrowings.
aso.rocks investigates’s findings showed that in the first nine months of the said year, 45.6 percent of tax revenues were spent servicing debts, a far cry from the 22.5 percent recommended by the World Bank for Nigeria and other low-income countries.
News reports by various newspapers further explained this debt-service-ratio projection.
CONCLUSION: The government’s claim that the 2023 budget was designed to use 97 percent of Nigeria’s tax revenues in 2023 for debt debt servicing is false.
The post FACT-CHECK: Onanuga’s Claim That Nigeria Budgeted 97% of Revenue for Debt Service in 2023 Is False appeared first on Foundation For Investigative Journalism.
