The Federal Government, National Assembly and some economists, yesterday, disagreed over the nation’s rising national debt profile and its management strategies.
While the the vice chairman of Senate Committee on Local and Foreign Debt, Bima Muhammad Enagi; Director General of National Institute of Legislative and Democratic Studies (NILDS), Prof. Abubakar Suleiman; President of Nigeria Economic Society (NES), Prof. Sarah Anyanwu, warned against Nigeria’s unsustainable debt, Director General of the Debt Management Office (DMO), Patience Oniha, on the other hand said it was not a crime to borrow.
They spoke at a one-day public lecture on Debt Sustainability in Nigeria, organised by NILDS.
Senator Enagi had queried the billions of dollars borrowed over the years wondering how they were expended by the government. He also decried the trillions of naira set aside every year for loan servicing.
He said the only way out was for government to increase its revenue base, saying the current arrangement makes a mockery of the national budget. The senator said: “From a low ratio of debt to gross domestic product (GDP) of about 3.4 percent at independence, Nigeria’s total public debt as at September 30, 2019 according to the Debt Management Office (DMO) stands at about N26.2 trillion (or $85.4 Billion). Of this amount total domestic debts is about N18 trillion (or $58.4 Billion) which is 68.45 per cent of the total public debts.
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“With the recent approval of the 2016-2018 External Borrowing Plan, the total debt stock would be about N33 trillion and 21 Debt/GDP ratio. “The big question in the minds of average Nigerian aware of this fact is “What did we do with the money? In other words, where did the money go? What do we have to show as a people for these huge debts accumulated over the last four decades or so? “Worse still, as a consequence of these borrowings, the sheer magnitude of the nation’s Annual Debt Servicing put at about N2.47 trillion for 2020 makes the provision of basic but essential amenities and infrastructure in the country, almost impossible without further borrowings.
“Clearly, Nigeria needs to get its public finance in order to avoid the potential fiscal and financial crisis ahead of it. The current debt situation in Nigeria needs to be properly managed and every borrowed Naira or Dollar, carefully deployed, especially in the face of the continued dependence of the nation’s economy on exported crude oil, with its usual price volatility.
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