States are to share N649 billion – the final tranche of the Paris Club Refund.
But debtor-states will have to settle their debts soon, Finance Minister Mrs. Zainab Ahmed said yesterday, adding that the Federal Government plans to begin the final phase of the debt refund.
She also revealed that the payments made by the Central Bank of Nigeria (CNB) as at March stood at N691.560 billion.
“The increase in CBN payments partly arose from exchange rate differential at the point of payment,” Mrs Ahmed said.
The minister, who did not divulge how much would accrue to each of the 36 states, noted that “some states still have outstanding balances, which will be refunded, in due course.”
The minister also stated that N4.8 trillion was shared out to the three-tiers of government between September, last year and April from the Federation Account.
“The sum of N784.7 billion realised from Value Added Tax (VAT) for the same period was also shared.”
On Nigeria’s growing debt profile, Mrs Ahmed stated that the debt increase from N12.2 trillion to N23.0 trillion is by design.”
“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, it was to reflate the economy and that means putting resources in the economy so that consumption will increase.”
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Based on the government’s findings, she said, the government “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 borrowing, Mrs. Ahmed said the 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.