Nigeria’s external debt portfolio stands at N551.27 billion (US $3.72b), while the domestic debt remains at N2.812.79 trillion at the end of June, the Central Bank of Nigeria (CBN), has said in its second quarter 2009 economic report.

CBN, in the report posted on its website at the weekend, disclosed that the Consolidated Federal Government debt hit N3.364.06 trillion or 14.8 percent of Gross Domestic Product, since the estimated total Federal Government debt as at the end of June 2009, rose by 11.3 percent over the level as at end of March.

The rise in total debt was accounted for by the issuance of Federal Government of Nigeria Bond, increase in treasury bills outstanding as well as Naira exchange rate depreciation during the quarter.

On total deposit, the report stated that "provisional data indicated growth in monetary aggregate in the second quarter of 2009. Broad money rose by 0.9 percent to N9,007.0 billion as against the decline of 1.8 percent in the first quarter 2009.

"At N5,677.2 billion, aggregate banking system credit (net) to the domestic economy increased by 17.8 percent in the second quarter of 2009, as against the decline of 2.6 percent in the preceding quarter. The development reflected largely the 15.4 percent rise in claims on the Federal Government reinforced by 3.6 percent increase in private sector."

The apex bank also stated that banking sector credit (net) to the Federal Government increased by 15.4 percent to negative N2.897 trillion as against the decline of 9.6 percent in the preceding quarter. The rise was attributed to the increase in deposit money banks (DMBs) holding of the Federal Government securities.

Banking system’s credit to the private sector, according to the CBN, was N8.305 trillion, compared with increase of 1.3 percent in the preceding quarter. This was attributed largely to the 4.6 percent decline in CBN’s holding.

In terms of currency in circulation and deposit at the CBN, the apex bank stated: "At N1,006.6 billion, currency in circulation fell by 3.0 percent in June 2009 over the level in March 2009. The decline was due wholly to the fall of 7.2 percent in currency outside the banking system during the period.

Total deposits at the CBN amounted to N5,388.7b, indicating a decline of 5.2 percent from the level in the preceding quarter."

The report revealed that Federally collected revenue in the second quarter of 2009 was N1.044.89 trillion. CBN said the collection represented "a decline of 21.2 %and 11.6 % from the proportionate budget estimate and receipts in the preceding quarter by 10.5 %and 17.3 % respectively."

According to the apex bank, at N696.61billion, oil receipts, which constituted 66.7 percent of the total was lower than proportionate estimate and receipts in the preceding quarter by 10.5 % and 17.3 %.

The decline in oil receipts, according to CBN relative to the preceding quarter, was due to the reduction in receipts from crude oil and gas sale as well as petroleum tax and royalties occasioned by militant activities in the Niger Delta.

Also, Mallam Sanusi has expressed the readiness of the apex bank for development of an Islamic bank, saying that the current global financial crisis has exposed the deficiencies in the conventional banking system.

He said that the current global meltdown has severely undermined and damaged investor confidence in the global financial system, adding that with the crisis comes opportunities.

Speaking at a Ramadan Symposium organised by the Movement for Islamic Culture and Awareness (MICA) yesterday, Sanusi said that the current financial crisis has provided scholars, lawmakers and bankers the chance to reassess the opportunities provided by Islamic finance.

Presenting a paper titled, "Islamic solution to the global economic meltdown", Sanusi said that in recognition of the benefits of Islamic banking in a growing economy like Nigeria, the Central Bank of Nigeria (CBN) initiated actions to develop a regulatory and supervisory framework for Islamic (non Interest) banking in Nigeria.

He said: ‘’This is to create an enabling environment for attracting the multi billion dollars global Islamic finance industry to Nigeria and to enable Nigerians benefit from sharia compliant banking services and products.’’

He stated that the draft policy framework towards the establishment of the Islamic financial industry was issued in March 2009, and is currently being reviewed for eventual release to the industry as a final document.

Sanusi said further that in keeping with its commitment to promote the development of Islamic banking in Nigeria, "the CBN intends to pursue extensive capacity building through collaboration amongst the various stakeholders, to develop cognate expertise in non interest banking; development of an adequate regulatory and supervisory framework for the effective operation of non interest banking in Nigeria.

"Promotion of greater cooperation and coordination among relevant regulators and other stakeholders, such as the Securities and Exchange Commission (SEC), Nigerian Stock Exchange (NSE), National Insurance Commission (NAICOM), Nigeria Accounting Standards Board (NASB), the Economic and Financial Crimes Commission (EFCC), Federal Inland Revenue Service (FIRS), the Federal Ministry of Finance and the National Assembly that may have important roles to play in the successful implementation of Islamic banking in Nigeria.

Source: The Nation