Minister of Finance, Dr. Ngozi Okonjo-Iweala has refuted claims by VP-elect Yemi Osinbajo that the outgoing administration owes $60billion in local and foreign debts.
Speaking with finance correspondents, Okonjo-Iweala said that the nation’s current debt stock stands at $63.7 billion and it encompasses domestic and multilateral loans by all the federal and state governments since 1960. She said various states of the federation accounted for 20% of the nation’s total debt stock.
Of the $63.7 billion debt, the minister said $9.7 billion or 15% is external while $54 billion or 85 per cent represents domestic debt. She said between 2007 and 2011, a debt of $17.3 billion debt was recorded while between 2012 and 2015, the debt stood at $18.1 billion.
She explained that the leap in the debt profile between 2012 and 2015 was triggered off by the 53 per cent wage increase implemented by the late Umaru Yar’Adua administration in a fell swoop.
This, she said, skyrocketed government’s borrowing from N524 billion to over N1 trillion in order to meet the salary increase, adding that the country’s domestic debt increased by $18.1 billion mainly because of the 53 per cent increase in the pay of civil and public servants.
The minister stated that at the time of the salary increase, she was still with the World Bank, adding that she had written and warned on the consequences of acquiescing to such a huge increase.
Absolving the Jonathan administration of blame, the minister said the government had in deed taken a careful and meticulous approach to managing the nation’s debt, noting that the present administration, for the first time in the nation’s history, retired a domestic debt of N75 billion in 2013.