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On Tuesday, Oct. 1, 2024, Nigeria celebrated 64 years of independence. To mark this celebration, President Bola Tinubu in his second Independence Day speech acknowledged the ongoing hardship and noted his commitment to finding sustainable solutions to alleviate the suffering of Nigerians.
In this speech, he made several claims while highlighting the achievements of his 16-month government. DUBAWA verified some of these claims.
Claim 1: Tinubu’s administration inherited a reserve of over $33 billion which has successfully been increased to $37 billion.
“We inherited a reserve of over $33 billion 16 months ago….Despite all these, we have managed to keep our foreign reserve at $37 billion.”
Reserves according to the Central Bank of Nigeria (CBN) are all foreign assets of a country held by the monetary authorities which can be mobilised at periods of external imbalances with ease. ln Nigeria, the composition of the extremal reserve consists of gold, IMF reserve tranche, Special Drawing Rights (SDRS), and convertible currencies. The major sources of extremal reserves are derivable from the components of foreign exchange inflows which include: receipt from petroleum, service income, other invisible items, capital importation, interest payments on foreign securities, extremal borrowing/ foreign aids and grants, and non-oil export proceeds, home remittances from the diaspora, among others.
Reserve data from CBN shows that as of May 26, 2023, before the president took over, the country’s reserve stood at $35,147,391,757, approximately $35.15 billion.
On Sept. 27, 2024, the reserve figure stood at $38 billion.
Verdict: TRUE
CBN reserve data shows that the country’s reserve was $35.15 billion before President Tinubu took over and as of Sept. 27, 2024, it is $38 billion.
Claim 2: His administration paid back the inherited forex backlog of $7 billion.
“We have paid back the inherited forex backlog of $7 billion” part of the president’s speech read.
Foreign exchange (FX) is a means of effecting payments for international transactions.
Recall that in February 2024, CBN revealed that it inherited $7 billion FX backlogs, and out of this, about $2.4 billion had issues meaning they are not valid.
Later on in March 2024, there were reports by Premium Times, Bloomberg, Channels Television, and Reuters, on the clearances of all valid Foreign exchange backlogs. According to these reports, CBN completed the payment of $1.5 billion, effectively settling the remaining balance of the FX backlog owed to bank customers.
Verdict: TRUE
Several news platforms nationally and internationally reported the clearance of all FX backlogs by CBN in March 2024..
Claim 3: We have cleared the ways and means of debt of over N30 trillion.
Dataphyte describes “Ways and means” in the Nigerian context as the loan obtained by the Federal Government from CBN to meet short-term needs or emergencies.
In May 2023, the Debt Management Office (DMO) securitised N22.7 Trillion Naira ways and means after former President Muhammadu Buhari on Dec. 28, 2022, requested it be converted into a government bond.
Securitisation is the practice of pooling together various types of debt instruments and selling them as bonds to investors.
This means that the loan will be restructured for over 40 years. In the first three years of repayment, the FG has a moratorium (which means they would not have to repay the principal amount to the CBN).
The Federal Government will be required to repay the loan interest within three years at a reduced rate of 9% per annum, down from the original 21%. After the three-year grace period, the debt will then be gradually repaid over 37 years.
Under Mr Buhari, the Ways and Means debt grew from N856 billion to N23.7 trillion.
Verdict: FALSE
The DMO document revealed that the loan had been securitised for repayment over 40 years, contrary to President Tinubu’s assertion that the debt had been fully repaid or cleared.
Claim 4: “We have reduced the debt service ratio from 97 per cent to 68 per cent.
According to BusinessDay, the debt service-to-revenue ratio has dropped to 74 per cent in the first quarter of 2024 (Q1), the lowest in five years. The news outlet quoted the Central Bank of Nigeria (CBN) that data from its latest quarterly statistical bulletin shows that Nigeria’s debt service-to-revenue is 74.3 per cent (N1.31 trillion) of total retained revenue of N1.76 trillion in Q1 of 2024. This was lower than 149.5 per cent (N1.97 trillion) in the same period in 2023.
Moreover, Punch newspaper reports that between January and May 2024, Nigeria paid $2.18 billion, or approximately N3.4 trillion, in debt service.
However, BusinessDay has reported a projected 110.4 per cent increase in 2024 due to difficulties meeting debt servicing obligations proportionate to revenue generation.
Verdict: False
According to BusinessDay, the federal government paid 74.3 per cent (N1.31 trillion) of its N1.76 trillion retained revenue in Q1 2024. Punch reports the federal government paid twice that amount between January and May. However, BusinessDay reports a projected 110.4 per cent increase in 2024 due to difficulties in debt servicing obligations proportionate to revenue generation.
Claim 5: Nigeria attracted foreign investments of over $30 billion in the last year
Foreign Direct Investment (FDI) is when an investor from one country gains lasting control or influence over a business in another country.
DUBAWA reviewed the Capital Importation Reports from the National Bureau of Statistics (NBS). These reports provide data on foreign direct investment, foreign portfolio investment, and other forms of investment inflows into Nigeria each quarter.
According to NBS data, In Q2 2023, following the start of President Tinubu’s administration, Nigeria attracted $86.03 million in FDI. In Q3 2023, Nigeria received $59.77 million in FDI. In Q4 2023, the FDI figure was $183.97 million. In Q1 2024, Nigeria attracted $119.18 million in FDI. In total, Nigeria so far received $448.95 million in FDI from Q2 2023 to Q1 2024, which is far below the $30 billion claimed by President Tinubu.
DUBAWA conducted a keyword search using the phrase “Foreign direct investment in Nigeria 2024” and found that the Minister of Industry, Trade, and Investment, Doris Uzoka-Anite, stated that Nigeria had secured investment commitments exceeding $30 billion over the past year.
The minister, however, clarified that these commitments are expected to materialise in the coming years, as projects commence and agreements are finalised.
Verdict: MISLEADING.
Contrary to the president’s claim, data from NBS for Q2 of 2023 to Q1 of 2024 shows FDI received so far is $448.95 million. Although the Minister of Industry, Trade, and Investment said Nigeria has secured investment commitments that exceed $30 billion, these investment refers to investment commitments which are yet to be fulfilled by investors.
Claim 6: FEC has approved the establishment of a local assembly plant for 2,000 John Deere tractors, combine harvesters, disc rides, bottom ploughs, and other farm equipment.
Nigeria is facing a serious food security challenge. Citing conflicts, economic instability, and atypical staple food prices, Relief Web explained that this challenge is likely to continue till early 2025, particularly in the Northern region.
According to the United Nations World Food Programme, about 4.4 million people are food insecure in three Northeastern states with a majority of them in Borno State. Nationwide, about 100 million Nigerians are food insecure as of Q1 2024.
As of Aug 2024, the food inflation rate stood at 37.52% on a year-on-year basis, marking an 8.18 percentage point increase compared to 29.34% recorded in Aug 2023.
Early in 2024, a report by the Center for Journalism Innovation and Development (CJID) highlighted the increasing cost of food items without a drop. It cited poor agricultural practices and infrastructure as one of the factors affecting food security in Nigeria whilst recommending investment in the sector.
According to several news reports, in its efforts to promote food security in the country, the Federal Executive Council (FEC) approved the purchase of 2,000 tractors, 4,000 disc ploughs, and 1,200 tractor trailers and other equipment under the National Agricultural Mechanization Programme.
Bayo Onanuga, presidential spokesperson, explained that Astride DMCC will supply all the equipment and will also set up a plant to assemble the machinery, in the second stage of the contract. He, however, did not provide further explanation as to when the project will be completed.
Meanwhile, the Minister of Agriculture and Food Security, Abubakar Kyari earlier spoke about the FG’s Memorandum of Understanding with the tractor manufacturing firm, John Deere where the company would supply Nigeria with around 2,000 tractors yearly in the next five years.
This was against the backdrop of Vice President Kashim Shettima’s meeting with top officials of John Deere where plans were made to establish a tractor manufacturing firm in Nigeria to boost mechanised farming.
Verdict: TRUE
Available reports show the president is right in his assertion that FEC approved the establishment of a local assembly plant.
