Nigeria is in deep wahala. Our debts are rumored to be about N11 trillion and in the 2015 budget, it was revealed that the country had a deficit of N911 billion.

But in a recent revelation by the Chairman of the APC Transition Committee, Ahmed Joda, it seems there are new figures emerging.

In an interview with Daily Trust, he revealed that the Federal Government is carrying a deficit of N7 trillion. According to the previous Government, the FGN is expected to earn N3.7 trillion in 2015 and spend N4.6 trillion; meaning  it needed to borrow N900 billion to fund the deficit. If the Government is already owing N11 trillion, so the additional deficit of N900 billion will now take the Government’s debt to N12 trillion.

In the handover notes received from the outgoing Government, the Chairman of the APC transition committee is suggesting the previous government suppressed the level of debt it carried and has now transferred it to the Buhari Government. Joda didn’t provide a breakdown but a source did the breakdown;

Research revealed that Ministries can actually duplicate costs, especially in collaboration with the Finance Ministry. Interestingly, the widely circulated interim report of the Transition Committee estimated N800bn was owed to contractors. It was however revealed that this estimate was revised using numbers submitted by the Ministries in their handover notes.

Findings revealed that these were the numbers submitted to the transition committee in the handover notes. The outgoing government did not provide any ageing on the debts. That is, it is not yet known how old these liabilities are. This will determine how contractors are paid.

A detailed list of the contracts was also not provided so it is possible that there is some double counting going on in the above numbers. Some of the balances may also be disputed and some contracts may be cancelled or terminated. No documentation was supplied to show whether the contracts were executed to specification.

This is a rough analysis, but the position of the Government seems to lean towards an urgent need to clear these obligations within one budgeting period for a number of reasons. Also, paying outstanding cash calls to oil companies is important if Nigeria wants to develop new fields, especially for the much-needed boost in gas supply. The other issues like salary payment, subsidy arrears and the North East redevelopment plan are immediate needs that need to be funded.

This means the Federal Government will probably ask its Finance Ministry to prepare a supplementary budget that will look like this:

Well, the whole analysis shows that the country already owes N11 trillion, borrowing N7 trillion more, makes the total debt exposure to N18 trillion.

Yes, we are in deep wahala.