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Kanu Okoronkwo Silas
Abia State University
Political Science
200Level, Nigeria.
by Nduka Chiejina
State governments will soon smile
to the banks as the federal
government has concluded plans to
commence the final phase of the
Paris Club debt refunds.
Addressing journalists in Abuja on
Thursday on the state of the
economy, Minister of Finance
Zainab Ahmed disclosed: “The total
sum of N649.434 billion was
verified by the Ministry as the
outstanding balance to be refunded
to the State Governments.”
She also revealed the payments
made by the Central Bank of
Nigeria as at March 2019 stands at
N691.560 billion.
“The increase in CBN payments
partly arose from exchange rate
differential at the point of
payment,” she said.
Ahmed, while not divulging the
status of the states with regards to
the Paris Club disbursements noted
“some states still have outstanding
balances, which will be refunded, in
due course.”
The finance minister also stated
that a total sum of N4.8 trillion was
distributed to the three-tiers of
government between September
2018 and April 2019 from the
Federation Account noting “the
sum of N784.7 billion realized from
value added tax (VAT) for the same
period was also shared.”
Speaking on Nigeria’s growing debt
profile, the finance minister stated
“the debt increase from N12.2
trillion to N23.0 trillion is by
The Federal Government, she said
“designed the Economic Recovery
and Growth Plan (ERGP) to reflate
the economy to take us out of
recession when we came on board
and we made an assessment, it was
clear that our country was going
into recession.
“When we did a research on the
best way to reverse the recession
was to reflate the economy and
that means putting resources in the
economy so that consumption will
Based on government’s findings,
she said they “designed the ERGP to
borrow in the first, second and
third years and in the fourth year
the borrowing was supposed to
start reducing. That is exactly what
we have done.”
Defending the borrowing, Zainab
Ahmed said government “made
sure that we borrowed to finance
capital projects.
“At the same time we went into
recession there were other
countries similar to Nigeria that
went into recession. Some of them
are still not out of recession but
because of the method we
“But the consequence of course is
the increase in debt and that is why
the ministry of finance and all its
agencies are working to make sure
that we increase revenues.”
She reiterated “at 19.09% Debt to
GDP ratio we still are the lowest
comparative to countries like Brazil,
South Africa that all have an
average of 56% debt to GDP ratio.
“If you look at our budget the debt
service to GDP ratio is 30% but
because revenues underperformed
it went as high as 50% to 55% and
in some months up to 60%. So if
our revenues perform optimally we
are in a good place as far as
revenues are concerned.”
The finance minister said the
country’s External Reserves grew
from $28.3 billion in 2015 to US
$44.69 billion as at May 13, 2019.
“This represents a significant
improvement that has helped to
stabilize the economy, including
stabilizing our exchange rates,” she
Also the Foreign Exchange (FX)
market, she said, “remains
relatively stable because from 2017
to now there is a significant
convergence of the NIFEX and
NAFEX windows and they have in
fact merged by the end of
November 2018.

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