FACTCHECK THREAD

We are getting queries on the statement by the Vice President that public debt stock rose by $10bn. Due to our recent work on expanding public debt, we will like to clarify.

The current rise of $10bn in public debt stock does NOT tell the full story. It can be MISLEADING. We have seen arguments explaining that the entire Federation borrowed only N3tn in three years since the debt stock rose by $10bn.

It is important to deconstruct the FG debt into EXTERNAL and DOMESTIC debt to get a full understanding for purposes of accountability. Please note that FG Debt Stock = External Debt + Domestic Debt. We will add links for private verification.

DMO figures showed that FG EXTERNAL debt alone grew from $7.34bn in June 2015 to $17.83bn in June 2018, that’s an additional $10.49bn in 3 years. This is FG EXTERNAL DEBT ONLY. Let’s consider FG domestic debt.

LINKS

June 2015: (link: http://dmo.gov.ng/debt-profile/sub-national-debts/1069-federal-and-state-governments-external-debt-stock-as-at-31st-december-2015/file)

June 2018 Link: (link: http://dmo.gov.ng/debt-profile/sub-national-debts/2543-states-and-federal-government-s-external-debt-stock-as-at-30th-june-2018/file)

DOMESTIC debt of FG as at June 2015 was N8.39tn while it stood at N12.15tn as at June 2018. That’s another increase of N3.76tn in 3 years. At an exchange rate of N305/$, that’s $12bn. This means the total increase in EXTERNAL and DOMESTIC debt is $22bn.

It is a public knowledge that the Naira was DEVALUED in recent years, and this act shrunk and expanded a lot of indexes. Those who put forward $10bn are comparing the wrong values without adding the important information that exchange rates for the times are different.

Public Debt Stock June 2015: (link: http://dmo.gov.ng/debt-profile/total-public-debt/54-total-public-debt-stock-as-at-30th-june-2015/file)

Public Debt Stock 2018: (link: http://dmo.gov.ng/debt-profile/total-public-debt/2529-nigeria-s-public-debt-stock-as-at-june-30-2018/file)

NOTE: The Exchange rate changed.

● See [Image 1]

NOTE: The Exchange rate of $ to 305.70 was used in converting the DOMESTIC debts to USD.

● See [Image 2]

In our observation, this administration (FG alone) borrowed $22bn in three years but due to naira devaluation GAINS, total public debt stock (for the entire Federation) increased by $10bn, which makes current claims TRUE.

We advise citizens to analyze data by properly checking public websites. However, it is true that public debt is now $63bn, grew by $10bn, because FG domestic debt in USD terms was $42.63bn in June 2015 and $39.75bn as at June 2018.

This does not mean that FG borrowed less DOMESTIC debt in 3 years. As we have shown above, the domestic debt of FGN grew from N8.39tn to N12.15tn from 2015 to 2018 respectively...

...DEVALUING exchange rate from N196.95/$ to N305.7/$ made the domestic debt in 2018 relatively SMALLER in USD terms

SCENARIO: It is like borrowing N1,000 in 2015 which is $5 at N200/$. If you borrow additional N500 at a new exchange rate of N300/$, you now owe N1,500 but you still owe an equivalent of $5.

Looking at the table above showed that Naira equivalent of the total debt has risen from N12.1tn to N22.4tn, a growth of N10.3tn.

It is important to classify debt into two categories considering that external debt will be paid in USD or other currencies while domestic debt will be settled in Naira. This also has IMPLICATION for debt SERVICING costs in the near term.

We also hope this “MARGINAL” increase in debt in USD terms does not unleash excessive borrowing by the Federation considering that public revenue in USD equivalent has also severely SHRUNK.

Also note that in the graphic above, states’ DOMESTIC debt rose from N1.69tn in June 2015 to N3.477tn in June 2018. Adjusting this for USD also does not tell the full story. States debt costs are deducted in Naira equivalent at prevailing “official” rates.

However, devaluation provides adjusted gains especially for monies earned in USD such as oil & gas revenues but losses for those earned in Naira such as CIT & VAT, when converted to USD.

We also see that many Nigerians have been on the wrong side of devaluation with income severely shrunk in Naira terms while those who export especially in the non-oil sector have seen relative gains.

We do not think acquiring debt is bad but we request more TRANSPARENCY on self-liquidating CAPITAL projects that such borrowings are tied to. We believe Nigeria should expand total revenue to at least meet its recurrent costs, in line with the Fiscal Responsibility Act.

A part of our work is to provide more TRANSPARENCY to the numbers, demand ACCOUNTABILITY and seek CLARIFICATION from PUBLIC institutions when necessary. Thanks and Good Morning Nigeria.

https://twitter.com/BudgITng/status/1057182823474438144?s=20

Buhari is just killing Nigeria and everyone is doing nothing about him ruining the country forever.

THanks TO GOD FOR Independent bodies like budgetIT...

These Explanations are very crucial so we are not swayed by merry talking!!

A Castartrophy is on ground which must have to be Corrected!!

Osibanjo is a disappointment to the academic community.

Hmmmmm..! Let's just say it like 7UP....the difference is Clear......!!

You will not find anything good about Buhari being president of Nigeria. He has no requisite education, management skills or confidence of investors. That’s why VP Osinbajo has to engage in lies and deception to cover up their mess

Caught red handed. This is not the first time Osibanjo would be caught lying.
I remember In 2015 he posted a picture of Reinhard Bonnke concert and passed it off as Buhari's campaign II Kano.

Pastor why?

In our observation, this administration (FG alone) borrowed $22bn in three years but due to naira devaluation GAINS, total public debt stock (for the entire Federation) increased by $10bn, which makes current claims TRUE.

You were busted by the Premium Times, so quit hiding under Budget IT to hide your false propaganda mission for an ethnic party called PDP..

CilicMarin:


You were busted by the Premium Times, so quit hiding under Budget IT to hide your false propaganda mission for an ethnic party called PDP..

I know it's painful but check BudgIT's clarification, Pastor was caught lying again.

CilicMarin:


You were busted by the Premium Times, so quit hiding under Budget IT to hide your false propaganda mission for an ethnic party called PDP..

u min, na onli dis won u c ontop all d tins wey dem yan?!
brain dey pain u

This thread should be on the front page

Lalasticlala

Mynd44

dukie25:


I know it's painful but check BudgIT's clarification, Pastor was caught lying again.

Where exactly is the lie?

From the documents from DMO (from op)

Total debt as at June 2015 is $63bn
Total debt as at June 2018 is $73bn an increment of $10bn in three years.

Is that not what Osinbajo claimed?

Lalasticlala


Mynd44

Lalasticlala


Mynd44 ..

Budget IT is growing in confidence

Buhari mad cows what sayest thou.

CilicMarin:


You were busted by the Premium Times, so quit hiding under Budget IT to hide your false propaganda mission for an ethnic party called PDP..

It will be like the government of Zimbabwe or Venezuela claiming they haven't borrowed much because the dollar value of their debt has shrunk as their currency's exchange rate collapses.

The Naira's exchange rate used to N1 to $1. If the Nigerian government borrowed N1bn in our local bond market at that exchange rate the dollar value would be $1bn. When the Naira falls to N305 to $1, it means the dollar value of the debt falls to circa $3m. This would be nothing to brag about though.

If they prefer to use the dollar value, why borrow more in dollars (foreign loans have more than doubled in the last 3 years) and why do they have an official exchange rate N305 which is much higher than the market exchange rate of N360?

4Play:


It will be like the government of Zimbabwe or Venezuela claiming they haven't borrowed much because the dollar value of their debt has shrunk as their currency's exchange rate collapses.

The Naira's exchange rate used to N1 to $1. If the Nigerian government borrowed N1bn in our local bond market at that exchange rate the dollar value would be $1bn. When the Naira falls to N305 to $1, it means the dollar value of the debt falls to circa $3m. This would be nothing to brag about though.

If they prefer to use the dollar value, why borrow more in dollars (foreign loans have more than doubled in the last 3 years) and why do they have an official exchange rate N305 which is much higher than the market exchange rate of N360?

The debt as at June 2015 is $63bn which is N12tr using N196/$ according to the document from DMO, let's assume the government decides to settle that $63bn TODAY (using the current exchange rate), how much in Naira do you think the government will pay? Is it the same N12tr?

You or anybody should answer this first before I continue.

abes:


The debt as at June 2015 is $63bn which is N12tr using N196/$ according to the document from DMO, let's assume the government decides to settle that $63bn TODAY (using the current exchange rate), how much in Naira do you think the government will pay? Is it the same N12tr?

You or anybody should answer this first before I continue.

The government will pay the external debt in dollars at $22bn and local debt in naira at N16 trillion.

The N12 trillion of June 2015 is N22 trillion in June 2018. Considering that the government's non-oil tax revenue is in Naira, it has put itself in a difficult position.

4Play:


The government will pay the external debt in dollars at $22bn and local debt in naira at N16 trillion.

The N12 trillion of June 2015 is N22 trillion in June 2018. Considering that the government's non-oil tax revenue is in Naira, it has put itself in a difficult position.

You did not answer my question.
Forget about the recent $10bn between 2015 and 2018. If this government decides to pay the $63bn debt for the previous administrations, how much will it be in naira? Is this government going to pay back using the exchange rate as at 2015 or the current exchange rate?

By the way, do you know that N22tr is ($63bn + $10bn) x N305?

abes:


The debt as at June 2015 is $63bn which is N12tr using N196/$ according to the document from DMO, let's assume the government decides to settle that $63bn TODAY (using the current exchange rate), how much in Naira do you think the government will pay? Is it the same N12tr?

You or anybody should answer this first before I continue.

305*63b = N19tr.

The reason is because the current government let the rate fall from N196/$ to N305/$. That extra N7tr is the consequence of their ineptitude. It also caused the loss of 11 million jobs.

-Lord

abes:


You did not answer my question.
Forget about the recent $10bn between 2015 and 2018. If this government decides to pay the $63bn debt for the previous administrations, how much will it be in naira? Is this government going to pay back using the exchange rate as at 2015 or the current exchange rate?

By the way, do you know that N22tr is ($63bn + $10bn) x N305?

N22tr is different from $22b. Comprehend whatever it is you're reading.

As at 2015, the total debt in Naira was $63b*196 = N12tr
As at 2018, the total debt in Naira is $73b*305 = N22tr

In just 3 years, APC has almost doubled the debt in naira value of what PDP borrowed in 16 years.

Do you understand now?

=============================================================================

This is where you criminals in APC seek to confuse zombies like you.

In 2015, the domestic debt paid in Naira was N8.39tn.
In 2018, the domestic debt paid in Naira is N12.15tn.

However, because of the Naira devaluation,

The dollar equivalent of the lower domestic debt in 2015 (N8.39tn at 305/$) is $42.63bn; while
The dollar equivalent of the higher domestic debt in 2018 (N12.15tn also at 305/$) is $39.75bn.

So while it appears like we did not borrow at all domestically in the last three years, we actually did (we borrowed N3.76tr).

-Lord

LordAdam16:


N22tr is different from $22b. Comprehend whatever it is you're reading.

As at 2015, the total debt in Naira was $63b*196 = N12tr
As at 2018, the total debt in Naira is $73b*305 = N22tr

In just 3 years, APC has almost doubled the debt in naira value of what PDP borrowed in 16 years.

Do you understand now?

-Lord

Haha..

How did you arrive at $73bn?

Why not just multiply the added $10bn by N305, why everything ($63bn + $10bn), is this administration responsible for the $63bn?

We are getting there...

By the way, where is that $22bn from?

abes:


Haha..

How did you arrive at $73bn?

Why not just multiply the added $10bn by N305, why everything ($63bn + $10bn), is this administration responsible for the $63bn?

We are getting there...

By the way, where is that $22bn from?

abes:
From the documents from DMO (from op)

Total debt as at June 2015 is $63bn
Total debt as at June 2018 is $73bn an increment of $10bn in three years.

Is that not what Osinbajo claimed?

I'm using the same false figures you're working with.

-Lord

abes:


Haha..

How did you arrive at $73bn?

Why not just multiply the added $10bn by N305, why everything ($63bn + $10bn), is this administration responsible for the $63bn?

We are getting there...

By the way, where is that $22bn from?

Because Nigeria did not start existing in 2015. Jonathan also inherited debt, that debt was added to his.

Buhari should not reject debts. He is liable for Jonathan's debt, like Jonathan was liable for Yar'Adua's and OBJ's second term debt. OBJ paid off all the debt accumulated by the military since 1966 plus the ones he borrowed himself. He didn't pay only his own.

-Lord

LordAdam16:




I'm using the same false figures you're working with.

-Lord

That's the DMO's figure, check the attached in the first post.