The Peoples Democratic Party (PDP); economic experts and civil rights groups have said the recent statement by the International Monetary Fund on Nigeria’s rising debts portends a great danger for the country.
The PDP took a swipe at the President Muhammadu Buhari administration, accusing it of mortgaging Nigeria’s future with his administration’s unprecedented level of borrowing.
The IMF had on Monday expressed concerns over Nigeria’s capacity to repay its debts and stressed the need for the Federal Government to mobilise more revenue domestically.
The Debt Management Office recently put the country’s debt profile at N21.73tn as of December 31, 2017, up from N12.2tn as of June 30, 2015.
Last month it was reported that the Federal Government had spent N3.72tn to service local debts in the past three years.
The National Publicity Secretary of the PDP, Mr. Kola Ologbondiyan, in an interview on Saturday, berated Buhari’s administration and also responded to the President’s recent claims that the PDP governments only left behind debts for him to pay.
The PDP spokesperson noted that it was on record that it was a PDP-led administration that successfully negotiated and got Nigeria out of several decades of debts owed the London and Paris Club of creditors.
Ologbodinyan also said that it was a PDP administration that set up the Excess Crude Account to save for the rainy day because it was aware of fluctuations in earnings from oil sales.
He said, “Ex-President Jonathan left behind over $20bn in the Excess Crude Account which by the way was a creation of the Peoples Democratic Party administration which foresaw the need to save for the rainy day.
“Our local and foreign debts were within reasonable thresholds. Today, they (Buhari’s administration) are claiming they have raised savings in the Excess Crude Account to a little over $40billion.
“They are not telling Nigerians the truth about the fact that what they claim we have as savings in the Excess Crude Account pales into insignificance when you consider the level of debt this administration has plunged the nation into within just three years.”
Finance and economic experts also cautioned the Federal Government against further borrowing.
They stated that the country’s debt profile of about N21trn was becoming unsustainable as it could be difficult to service it owing to revenue challenges facing the country.
They advised that rather than continue to rely on borrowing to finance its activities, the Federal Government should adopt other sources of funding the infrastructural needs of the country such as concession, privatisation, and public private partnership arrangement.
Those that spoke on the issue were the President, Institute of Fiscal Studies of Nigeria, Mr. Godwin Ighedosa; the Director-General, Abuja Chamber of Commerce and Industry Mr. Chijioke Ekechukwu; Registrar, Institute of Finance and Control of Nigeria, Mr Godwin Eohoi and a former Managing Director, Unity Bank Plc, Mr Rislanudeen Mohammed
Ekechukwu said, “It is expected that the debt profile of a country would rise considering the fact that we have a deficit budget and even the deficit side of the budget was not met in the last budget year.
“With the recession of last year, government would need to continue borrowing to meet the increased size of the deficit. Of course, the borrowing portends danger for the economy because our debt profile is rising and we do not know when we are going to scale it down.
Mohammed said Nigerians should be worried about the country’s debt burden rising at a faster rate than revenue generation.
He said, “If something urgent is not done to shore up government revenue, it would be difficult for the government to service its debt obligation.
“The debt profile is scary and worrisome. It’s not a bad thing to borrow but it is good to be assured of the sustainability of the borrowing. If you go on a borrowing spree then it would be difficult to service this debt when you dont have the capacity to pay.”
In his comment, Ighedosa said while it was not bad to borrow, there was the need for a reduction in government expenditure. He said, “We have a high fiscal deficit which can only be funded through borrowing.”
Also, the Centre for Anti-Corruption and Open Leadership and the Coalition for the Defence of Human Rights, said the Federal Government must block all the financial leakages in its expenses and intensify its recovery of stolen funds to be able to survive without borrowing externally.
