#FactCheck: Did Kogi Debt Rise From N10.3b to N96.9b in 2018?


CLAIM: One of the governorship aspirants in Kogi claimed the state debt profile rose from N10.3 billion in December 31, 2014 to N96.9 billion in December 31, 2018.

CONCLUSION: FALSE, according to the Debt Management Office, as at 31 December 2018, the domestic debt profile of Kogi state was N84, 922,376, which we believe the aspirant was referring to

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FULL STORY:

One of the aspirants of the Kogi state Governorship election, Aminu Abubakar Suleiman, in an interview with Daily Trust on July 7, 2019 claimed Kogi state debt profile rose from a paltry N10.3 billion in December 31, 2014 to N96.9 billion in December 31,2018.

He cited the Debt Management Office (DMO) as his source.

VERIFICATION OF CLAIM:

To start with, here’s a little information on debt management in Nigeria.

Debt is an amount of money borrowed by one party from another. In Nigeria, when a government entity borrows money, it could either be a domestic debt or external debt.

Internal debt or domestic debt is the part of the total government debt that is owed to lenders within the country. Commercial banks, other financial institutions etc. constitute the sources of funds for the internal debts.

External debt is the portion of a country’s debt that was borrowed from foreign lenders including commercial banks, governments or international financial institutions. These loans, including interest, must usually be paid in the currency in which the loan was made.

The Debt Management Office (DMO) is the agency of the federal government of Nigeria that manages the country ‘massive’ debts pile. Their Mission is to meet the Government’s financing needs in a prudent manner that supports economic development, while proactively managing the risks associated with the public debt.

Kogi internal debt DID NOT Rise From N10.3B to N96.9B in 2018, but to N84.9B

Although the claimant did not state which of the debt profiles he was referring to [and all attempts to reach him proved abortive], we assume that he meant state domestic debt for two reasons.

One, his claim was stated in naira. Two, he was comparing two figures (N10.3B and N96.9B) and we found out that the state’s domestic debt for 2014 was actually N10.3B, not its total debt.

If he was trying to compare the domestic debt in 2014 to the total debt in 2018, that would be an unreasonable comparison.

According to data from DMO on states domestic debt stock, Kogi state as at December 31, 2014 had a domestic debt of N10, 304,743,606.40 which makes the first part of the claim true.

However, as at 31 December, 2018, Kogi state debt profile was at N84, 922,376,449.78 [N84.9 billion] as against N96.9 billion claimed by the governorship aspirant. Even if we should add the external debt of $32.37 billion [converted to N9.9B based on the official naira exchange value of N307 at that time], it would be N94.8 billion, which is less than the aspirant quoted.

Conclusion

The claim that the Kogi state debt profile rose to N96.9 billion in December 31, 2018 by the Governorship Aspirant is false.

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