DESPITE growing rate of revenue being accrued
to the nation�s coffers following windfall from the sales of oil, there are
indications that the fortune of the country would be dwarfed by rising
profile of external debt which stood at $34 billion as at now.
The figure which is up by $1.1 billion from the
$32.9 recorded last December, was due to adverse exchange rate movements of
the dollar vis-�-vis European currencies in which large part of Nigeria�s
debt is held as well as due to arrears accumulation.
Presenting the 2005 budget proposal before the
National Assembly on Tuesday, President Olusegun Obasanjo said the nation
has again budgeted $1 billion for payments to Paris Club being the largest
creditors.
The country, he said, would seek the
understanding of the creditors on this level of payment based on the
nation�s great needs for infrastructure expenditure and desire to meet the
Millenium Development Goals.
�It is clear that we need a sustainable
solution to our debt overhang since arrears accumulation is not a viable
strategy,� President Obasanjo observed.
The President further explained, that since the
country embarked on reform measures this administration had built a basis
for better dialogue with the nation�s creditors and were now beginning a new
drive for a realistic solution to the debt problem.
Revealing the difficult areas between the
country and its creditors, President Obasanjo isolated the high oil price
environment� which he said made dialogue difficult between the two.
Furthermore, he said attracting the private
sector in the context of a large debt overhang is very difficult for the
country.
On debt servicing, the president revealed that
a total of N360 billion had been earmarked for domestic and foreign debts
service in the 2005 budget proposal.
The figure he said was made up of N190 billion
domestic and N170 billion external debt services. This he added, indicated
that the amount earmarked is lower by N9 billion than that of 2004.
President Obasanjo further revealed that total
internal debt stood at N1.329 trillion most of which in short term treasury
bills.
AS part of strategy to contain domestic
borrowing, the Debt Management Office (DMO) was engaged in restructuring
exercise to convert short term paper into medium and longer-term obligations
thereby providing some debt service relief to the government.
