According to Zainab Ahmed, Minister of Finance, Budget, and National Budget, the Federal Government has already paid out N1.98 trillion to oil-producing states as part of the 13 percent backlog in oil derivation payments.
The Minister revealed this on Thursday in Abuja during the sixth iteration of the President Muhammadu Buhari administration scorecard (2015–2023).
The 13% derivation fund recently came to light after Rivers State Governor Nyesom Wike claimed that the oil-producing states had withheld their portion of the derivation arrears that had been paid by the federal government to all of the Niger Delta states since 1999.
Ahmed claims that despite some of the funds having been available before the current administration, the total was paid in seven years.
She said, “One of the key functions of the Ministry of Finance Budget and National Planning is to support the states. We wouldn’t have been able to grow consistently without enabling the states to grow because it is a federation.
“Mr. President has been very uniquely generous in his support to states. I can say no president has provided the level of support provided to the states of the Federation. He understands that the federating units need to work together as one to achieve the targets that he has set for the country. So everybody goes to support sub-national governments. In seven years, we have disbursed N1.98trn in funds to oil-producing states.”
Ahmed argued that Nigeria was not insolvent when asked about the nation’s financial situation. Her remark comes amid criticism of the Buhari administration’s extensive borrowing, which is said to have drained the nation’s resources.
The federal government’s debt through Ways and Means increased by N6.3 trillion (10 months) from N17.5 trillion in December 2021 to N23.8 trillion in October 2022, according to data taken from the CBN website.
These loans are not currently counted into the nation’s overall public debt stock (held by the federal and state governments), which is N42.84 trillion.The cost of repaying debt in July exceeded the federal government’s retained revenue in the first four months of 2022 by N310 billion.
When he presented the 2022 fiscal performance report for the time period, Ahmed made this disclosure, stating that the Federal Government’s total revenue was N1.63trn, while debt service gulped N1.94trn.
She urged that “revenue underperformance and spending efficiency at national and sub-national levels” needed to be addressed immediately.
Similar to this, Akinwumi Adesina, President of the African Development Bank (AfDB), estimated Nigeria’s external debt to be N16.61 trillion ($40 billion) in his review of Nigeria’s debt profile.
“Nigeria needs support to address this debt burden,” he said in his conclusion.
However, Ahmed said that Nigeria has not in any way fallen behind on its domestic or foreign debt obligations when she presented Buhari’s scorecard on Thursday, adding that the nation has not chosen to seek debt relief. The minister stated that the Federation Accounts Allocation Committee is still used by the nation to distribute money to the three levels of government (FAAC).
She said the Federal Government has since 2015 disbursed N5.04trn to state governments, disclosing that the non-oil sector drives the country’s economy more than the oil sector owing to vandalism of infrastructure. Ahmed further said oil production is increasing, stressing that as of October 2022, it soared to 1.4 million barrels per day. She also said N1.7trn was released for this year’s capital projects as of September 2022