Enough of growing Nigeria’s Debt Profile

Enough of growing Nigeria’s Debt Profile

Issue Opinion

Enough of growing Nigeria’s Debt Profile 

By Abba Dukawa 

 

As a result of our inability to cultivate financial discipline and prudent management of the economy, we have come to depend largely on internal and external borrowing to execute government projects with attendant domestic pressure and soaring external debts, thus aggravating the propensity of the outgoing civilian administration to mismanage our financial resources.

Nigeria was already condemned perpetually with the twin problem of heavy budget deficits and weak balance of payments position, with the prospect of building a virile and viable economy.

However, in the case of Nigeria, its impact was aggravated by mismanagement.

We believe the appropriate government agencies have good advice but the leadership disregarded their advice.’’

The situation could have been avoided if the legislators were alive to their constitutional responsibilities; instead, the legislators were preoccupied with determining their salary scales, fringe benefit and unnecessary foreign travels, et al, which took no account of the state of the economy and the welfare of the people they represented.

This was what Major General Muhammadu Buhari said In January 1984 to justified the military coup against civilian administration where accused both legislators and executive members of not being financial discipline and prudent management of the economy.

Since 2015 what he had accused both legislators and executive members of not being financial discipline and prudent management of the nation’s economy it’s almost what is going on in the country where our nation became a debtor country.

It may also be recalled since Buhari took over on 29 May 2015, Nigeria debt has almost doubled at the end of June 2015, country debt had risen slightly to N12.1 trillion.

By the end of June 2018, total public debt had almost doubled to N22.4 trillion.

Going by this frightening figures released by the Debt Management Office, the total debt stock stood at some humongous N24.047tn as of March 31, 2019. As this December Nigeria’s debt risen to N25 trillion (US$80 billion).

Enough of growing Nigeria’s Debt Profile

A gaskiya (in fact) the recent request by President Buhari to National Assembly to approve $30 billion of foreign borrowings after a similar request three years ago was rejected is scaring and Nigerians on the street not wants it.

Because poor Nigerians seeing raising over Nigeria’s ever escalating debt profile is scary economic situation throws up some salient questions, all begging for answers.

Nigeria is using 50% of its revenue to service its debts! This is unsustainable. But this is just part of an economic malaise that has consigned millions of Nigerians to “multidimensional poverty” even as a few favored ones continue to enjoy the nation’s wealth.

Surely Nigeria do not need comprehensive mathematics to understand that the country’s economic growth is undermined by the huge debt stock as well as other obvious factors including sheer profligacy in running government.

It may be recalled that in June 2017, economy experts, Prof. Pat Utomi and Mr. Bismarck Rewane, had expressed a similar worry over the increasing debt burden at both the state and federal levels and the situation has only worsened over the years.

It seems like most of the financial policies of the administration do not favour masses that spent hours under the sun to vote the administration. It may be recalled that Nigeria’s Senate on 21 November 2019 passed the Finance Bill, 2019 after the third reading just as the House of Representative is expected to kowtow.

The bill, as presented to the National Assembly in October 2019, includes vast changes to the Companies Income Tax Act, Value Added Tax (VAT) Act, Petroleum Profits Tax Act (PPTA), Personal Income Tax Act, Capital Gains Tax Act (CGTA), Customs and Excise Tariff Etc. (Consolidation) Act and Stamp Duties Act.

What really surprising Nigerians is the apparent insensitive of our lawmakers in understanding the gravity of their actions in causing more hardship to Nigerians.

This is because contemplating an increase in VAT rate now is bad timing and inconsistent with current economic reality… VAT increase will lead to higher inflation, interest rate hike, and more unemployment which will generally make people poorer.

Enough of growing Nigeria’s Debt Profile

One’s current concern, however, is who will pay these huge debts? Will the burden being left by the reckless and frivolous political class not be too weighty for the lean shoulders of our jobless children? Will they not be turned to slaves and beggars in their own country by the creditor nations, just because they want to pay off the debts left by the locusts that have ravaged our common patrimony? But that is not all.

One is surprised too about the speed with which leaders go for questionable bonds at the end of their tenures.

What is the guarantee that the incoming administrations and the subsequent ones would have the capacity to repay without harming the security and welfare of the citizens which are their primary reasons of being in government and whose interest they claimed to have obtained the loans? The earlier we started having credible answers to these burning questions, the better for us all.

Dukawa is on the staff of the Triumph and can be reached at abbahydukawa@gmail.com

Leave a Reply

Your email address will not be published. Required fields are marked *