…as Senator Haruna Manu outlines ways and means of local and foreign debts servicing
…domestic debt 5.4trillion. Current debt as provided in the appropriation is 2.7trillion making a sub total of 8.2trillion
The House of Representatives and Senate Joint committee on Debt Management Office, DMO on Tuesday recommended NN967,400,842 for personnel cost in the 2024 Appropriation Bill.
Senator Haruna Manu who is Deputy Chairman, Senate Committee on Local and Foreign Debts represented the committee chairman, Senator Aliyu Wamakko outlined DMO’s budget estimates and sources to be explored to service the debts.
Manu while making the presentation gave a vivid breakdown which made Senate Committee Chairman on Appropriations, Senator Solomon Olamilekan to applaud him describing the breakdown as excellent.
Hear Senator Manu:
“Our committee in accordance with section 81 of the Senate standing rule as it affects debt service and debt management, payment of local contractors, the joint committee of the House of Representatives and Senate met with the officials of the Federal ministry of finance, Debt Management Office in the course of considering the provision of payment of local contractors and debt servicing.
“The joint committee has recommended as follows. The sum of N967,400,842 as proposed for personnel cost in the 2024 appropriation, however the amount required for the payment of salaries of the members of staff of the DMO is N1,43, 282,180.60 which implies a short fall of 75,881,338.01.
“So Mr Chairman this is very important as you know personnel cost is very important, we have a shortfall of 75.8million.
“OVERHEAD COST. The amount proposed for the DMO overhead cost in the 2024 Appropriation Bill is 467,829,497.
The joint Committee sustained the provision of 247,736,642,470 for the 2024 appropriation.
CAPITAL:
“The amount proposed for DMO capital expenditure in 2024 Appropriation Bill is 249,919,000 which I believe is one of the least.
DEBT SERVICE.
“The Debt Management Office will continue to raise money during the financial year through issuance of bonds to finance deficit gaps in the budget.
“In the course of budget defence the DG of DMO confirmed that appropriate provisions have been made for debt service in the annual budget to ensure that the federal government debt service obligations are made as at when due.
“The important issue therefore is for revenue to grow significantly to reduce debt service to revenue ratio, to reduce to the level of new borrowins while also providing resources to the government in its provision for debt service in 2021 and 2022.
“Domestic debts including ways and means as provided in the appropriation is 5.4trillion. Current debt as provided in the appropriation is 2.7trillion making a sub total of 8.2trillion.
Therefore the joint Committee recommends as follows for 2024 Appropriation.
Domestic debt 5.4trillion, foreign debts 2.7trillion making a total debt services of 8.2trillion. Recurrent as earlier mentioned Mr Chairman for personnel is 967,400,842.05. Overhead is 467,829,496. Capital is 249,919,000.
“Mr Chairman the increase in allocation for debt service in the 2024 budget, domestic and foreign debt stock and the exchange rate of the naira this we have attached the details in our submission.
“The provision of 10.9trillion for payment of local contractors debt in 2024 appropriation bill is expected to settle the backlog of outstanding to meet its financial obligations to local contractors and in turn we will expect a robust economy.
“Therefore the joint Committee suggests that the payment of local contractors in 2024 Appropriation Bill should be made over the eight geopolitical zones.
“The subcommittee recommends that the provision of 10.9trillion in 2024 Appropriation Bill is sustained.
NEW BORROWING IN THE 2024 APPROPRIATION BILL.
“The 2024 Appropriation Bill has a deficit of 8.8trillion. Let me read the full figure 8,880,443,964,174.
“The DMO plans to raise funds for the new borrowing, domestic borrowing of 6,060,919,156,81 will be riased by issuing federal government bonds, Nigerian Treasury Bills, Federal Government Saving Bonds and perhaps Green Bonds.
“The new domestic borrowing will be provided through the issuance of Federal Government Bond, Nigerian Treasury Bill, School and Saving Bonds and possibly Green Bonds in the domestic capital market.
EXTERNAL BORROWINGS:
“The options that will be considered for the new external borrowing of 1,767,610,321,779 are concessional source such as loans from export credit agencies, development financial institutions and financial source (Euro bonds and bonds from banks).
THE JOINT COMMITTEE RECOMMEMDATIONS:
“The joint committee unanimously sustained all provisions in the 2024 proposal as it relates to Debt Management Office, debt services and payment of local contractors.
In conclusion Mr Chairman, Debt Management Office is discharging a crucial mandate of the Nation’s debt.
“The subcommittee invites the committee of appropriation to approve the recommendations for the Debt Management Office for debt services and provision for payment of local contractors by the federal ministry of finance.