Thread by @ugodre

Ok time to weigh into this Naija public debt argument. Probably late on twitter street but this is for some of my followers who have asked for my opinion.

So how much is Nigeria actually owing the world? Let’s explain

As you may well know, our public debt profile (FG & sates) is divided into dollar & naira.

Dollar portion is $22b & used to be $10.3b as at June 2015 when PMB took over.

Naira portion is N15.6tr & used to be N10tr in June 2015

So dollar potion has risen by over 120% while naira portion has risen by over 56%.

This should be fairly easy for anyone to discern.

So why the controversy and mischief?

Controversy and mischief sets in when you try to get a single homogeneous balance of what our public debt is. That is, total in naira or in dollar.

This is where politicians and critics delve into alternative truths.

If you convert the naira portion using N305 you get a total of circa $51b. Add the circa $22b in external debt you get a total of $73b as Nigeria’s public debt.

Now to the comparison...and where politics sets in.

If you compare to 2015 using the same N305 exchange rate you get $43b suggesting that total public debt profile rose by $20b. Right? Well you’d like this version of your in the opposition or in the business of malicious criticism.

Now to the alternative truth.

To arrive at the rise in public debt the govt. used the exchange rate of June 2015 of about N197. This amounts to circa $63b compared to $43b if you decide to use the more severe N305.

Why does this all matter? Optics!!

For critics of the govt or those in opposition saying public debt profile rose from $43b to $73b makes good political sound bites.

For the govt, saying public debt rose from $63b to $73b Also makes good political soundbite.

So what is the correct way to look at this?

Separate them!! But if you must have them as one which is fair then I’ll look at it this way.

As an accountant I’d look at this from the point of view of obligation.

As at June 2015 the govt was obligated to pay $63b in public debt as and when due.

As at 2018 June that obligation is $73b.

Thus the difference in obligation is circa $10b.

As a citizen I’ll suggest you consider all this as politics and an attempt to score cheap political points from all sides.

Don’t be fooled at all. Debt is debt.

Nigeria owes $22b and N15.6tr and currently has an obligation to pay this money in dollars and naira respectively.

It can borrow $51b convert to Naira at N305 and pay down the naira portion. Or borrow N6.7tr convert to dollars and pay down the $22b debt.

As per debts, Nigeria needs it if this country is to remain solvent.

What should matter to you is what the debt is being used for at what cost and how we going to pay for it.

For the answers, hold your leaders accountable. Leaders currently in powers and those aspiring to take power.

*End*