State of emergency looms in road sectorSenate plans financial succour for states, councilsLawmakers seek merger of weak statesA FEW years after the administration of former President Olusegun Obasanjo brought Nigeria out of the Paris and London clubs' debt over-hang, the country's debt profile is again assuming a worrisome dimension.The Senate, which is uncomfortable with the new development, yesterday disclosed that the nation's debt profile had risen to $39.72 billion (N6.02 trillion. It put the external debt element at $5.398 billion and domestic debt at N5.21 trillion.This represents a significant leap on the$3.62 billion the Debt Management Office (DMO) presented as the country's external debt stock at the end of March 2009.The DMO had said after the country's exit from the Paris Club debt in 2005 and 2006, the external debt stock dropped substantially. Before the government got the debt relief, Nigeria's external debt stock in 2004 was $35.94 billion and by December 2006, the amount declined to $3.54 billion. And five years later, the figure has risen by $1.85 billion.At the inauguration of the Senate Committee on Local and Foreign Debts yesterday in Abuja, the panel's boss, Ehigie Edobor Uzamere, said: 'This amount is unsettling and called for concern.'For states and local councils, which have been crying over paucity of funds to execute their core projects, reprieve appears on the way for them as the Senate has mandated its relevant committees towork out remedialmeasures to avoid their possible collapse.The Upper House has also asked the Executive arm of government, to forward a new revenue sharing formula that could give the states and councils an edge overthe Federal Government.The Senate action was sequel to a motion titled: 'Looming danger of bankruptcy in states - the need for fiscal evaluation,'' moved by Olubunmi Adetumbi (Ekiti North).On the country's rising debt stock, Uzamere urged the Executive to focus on borrowing for projects with self-repaying capacity and job generation rather than borrowing to finance gaps in budgets that are largely recurrent.'He said the debt profile was 'more than the Federal Government's yearly budget as its external component translates to 2.76 per cent of our Gross Domestic Product (GDP) and its domestic component translates to 17.53 per cent of the GDP.''It is also the thinking of the Senate that a state of emergency in the road sector is imperative. The Chairman of the Senate Committee on Works, Ayogu Eze, during the panel's inauguration by the Deputy Senate President Ike Ekweremadu, said the Upper House should declare a state of emergency in the sector.Eze said he was taken aback by the conditions of roads in the country and stated the resolve of his committee to ensure that a special fund was created for fixing them.'We have prepared our scope of work but I must state the enormity of work to be done. We have resolved to work with the Ministry of Works and all other relevant agencies to ensure that things change for the better,'' he said.The lawmaker said the committee, through appropriate legislations, would seek the creation of a special fund for the repair of the roads because the yearly budget might not suffice.Ekweremadu asked the committee to collaborate with the Works Ministry to ensure that roads were repaired. He added that in constructing new roads, they must ensure that necessary facilities were put in place to provide convenience for road users.Still on the nation's debt, Uzamare asked: 'Do we have the capacity to repay this money considering our yearly revenue profile' What is the future value of the total debt in 10 years' time' Needless to say that proper DSA reveals a country's susceptibility to debt distress; the committee will align its energy with the Executive to review the country's debt policy and thereto, redefine its debt strategy.'He stressed the need for government to embrace Public Private Partnership (PPP) through adequate legal framework.Uzamere continued: 'Unfortunately, due to inadequate information, the provision for PPP in the DMO (amendment) Bill was rejected. The National Assembly needs to revisit this issue and many others that were rejected in the bill so that we will be seen as giving the necessary backing to effective debt management.'Adetumbi, who sought better deal for the states, said owing to the rising wage bills incurred by states and councils, they might soon be in crises that could 'cripple the nation if nothing was done to arrest the situation.'Tendering statistics from Nigeria Governors' Forum (NGF), which puts only four states as being financially healthy,Adetumbi said in most states of the federation, the burden of employment is on the state and councils as the private sector is almost idle.'The bulk of the revenue of these states is currently financing pay roll of the civil service, which constitutes less than four cent of the total population in all states; if this trend continues, many of the states would become financially insolvent and increasingly handicapped to finance real sector and drive economic growth, job creation and improved livelihoods,' he submitted.He listed states with healthy status as Abia, Akwa Ibom, Anambra and Jigawa while Imo, Kwara, Lagos, Kebbi and Delta were classified as ''tolerable.''Most of the senators, who contributed to thedebate,agreed that there was a problem with the present federalism and even called for merging of some states found to be unviable. They advocated a strengthening of the federalism with a view to making states and councils more active.The Senate Leader Victor Ndoma-Egba (SAN) said the time had come for the country to take another look at the federal structure.Other lawmakers, who backed the motion, were James Manager (Delta South),Ahmed Lawan (Yobe North), Adegbenga Kaaka (Ogun East) and Nkechi Nwogu (Abia Central). The last two accused the states of not doing enough to generate revenue internally butDr. Bukola Saraki (Kwara Central)explained that internal revenue generation was poor because of low economic activities at that level.Ekweremadu, who presided at the session, put the question and the motion was passed directing the committees on Finance, Appropriation, National Planning, States and Local Councils, to work out remedial measures to avoid the collapse of the states.
Click here to read full news..
