Buhari’s borrowing good for Nigeria —Lai Mohammed

The Minister of Information and Culture, Lai Mohammed, told Nigerians on Monday there was no cause for alarm over the country’s debt profile.

Mohammed stated this in Lagos while briefing journalists on the major achievements of the President Muhammadu Buhari administration for the outgoing year

He said there were misrepresentations in the figures being pushed out in certain quarters about the debt profile, adding that the country had not reached its debt ceiling of 25 percent in total public debt stock to Gross Domestic Product (GDP).

He said: “Recently, there have been concerns in certain circles about the country’s growing debt, both domestic and external.

“In the process, there have been some misrepresentations and scaremongering.

“We therefore, believe it is important to put things in perspective, so our citizens will be well informed.”

The minister said it was not correct to say that Nigeria’s external debt alone was $81.274 billion.

He added: “The public debt stock is actually a cumulative figure of borrowings by successive governments over many years.

“It is therefore, not appropriate to attribute the public debt stock to one administration.

“Nigeria’s total public debt stock in 2015 was $63.80 billion comprising $10.31 billion of external debt and $53.49 billion domestic debt.

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“By June 2019, the total debt stock was $83.883 billion made up of $27.163 billion of external debt and $56.720 billion domestic debt.”

Mohammed said there was no cause for alarm because Nigeria had a debt ceiling of 25 percent in the total public debt stock to (Debt/GDP), which it had operated within.

He said the ratio for December 31, 2018 and June 30, 2019 were 19.09 percent and 18.99 percent respectively.

The minister said that the debt service to revenue ratio had been higher than desirable, hence the push by the government to diversify the economy and increase oil and non-oil revenues significantly.

According to him, the government is also widening the tax base to capture more tax-paying citizens.

“In the face of massive infrastructure decay, no responsible government will sit by and do nothing.

“This administration’s borrowing, therefore, is aimed at revamping our infrastructure, including roads, bridges, railways, waterways, and power to help unleash the potential of the nation’s economy.

“The loans for the education sector will contribute to the development of our human capital, while the loans for the agricultural sector will help the move to diversify the economy.

Former President Olusegun Obasanjo had said last week that Nigeria faced an impending bankruptcy, with the country’s external debt rising by 700 percent in four years.

He said Nigeria would need to commit half of its foreign earnings to service its indebtedness.

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