BY FESTUS OKOROMADU
Economic experts at Financial Derivatives Company Limited have questioned the authenticity of headline inflation figures released last week by the National Bureau of Statistics.
The experts stated that the latest figures from the NBS were not real as the integrity of the data used is unrealistic because the composition of the basket was outdated.
They insisted that the current basket used by the NBS analysis to arrive at the figures published was last reconstituted in 2009 while the standard practice was for it to be revised every five years.
Consequently, FDC analysts said the country’s true inflation value could be as high as 45 percent as against the official 25.80 percent by the NBS for the month of August, 2023.
The NBS had reported that the country’s headline inflation rate increased to 25.80 percent in August driven mainly by food and non-alcoholic beverages which contributed 13.36 percent.
This figure is 1.72 percent points higher when compared to the July 2023 headline inflation rate which was 24.08 percent.
Similarly, the NBS said the country’s total public debt stock surged to N87.38 trillion in the second quarter of 2023, representing 75.29 percent or N37.53 trillion compared to N49.85 trillion recorded at the end of March 2023.
The NBS said the debt included the N22.71 trillion Ways and Means Advances of the Central Bank of Nigeria to the Federal Government.
According to the NBS, the figures obtained from the Debt Management Office encompassed both domestic and external debts of the Federal Government, the 36 states, and the Federal Capital Territory.
The amount made up of domestic debt constitutes the majority at 62 percent, amounting to N54.13 trillion, while external debt accounted for the remaining 38 percent, totaling N33.25 trillion ($43.16 billion).
A breakdown of the state’s profiles show that Lagos State recorded the highest domestic debt in Q2 2023 with N996.44 billion, followed by Delta State with N465.40 billion while Jigawa State recorded the lowest domestic debt with N43.13 billion, followed by Kebbi State with N60.94 billion.
In addition, Lagos State recorded the highest external debt with $1.26 billion, followed by Kaduna State with $569.38 million. On the other hand, Borno State had the least external debt with $18.75 million, followed by Taraba State with $21.92 million.
Reacting to the rise in the debt stock, Lead Director Centre for Social Justice, Eze Onyekpere said, the rising debt is worrisome, but also observed that the increase must have been because of the adjusted value of the naira viz a viz the foreign debts.
He said, “But even at that, we are still borrowing,” adding that the government should be very cautious about how it incurs debts and to what use we put the money we borrow.
According to him, “We also need to make the process of borrowing more transparent. The government should be able to advertise the fact that they are going to borrow and the purpose for the borrowing. We cannot continue to borrow for consumption. If 50 percent of that money was invested in capital projects, we won’t be where we are today.”
Also commenting, an economic analyst, Monday Osasah, said though he does not have details of what composition of the debts, Nigerians should be worried about the increasing debts because whatever be the case, the debts must be paid.
He said it will be more worrisome if the monies borrowed were not put into productive activities but for consumption.
