DEBT BURDEN: Atiku laments Nigeria’s economic instability, proffers solutions

Atiku Abubakar, pesidential candidate of the Peoples Democratic Party (PDP) has expressed disappointment over Nigeria’s current debt profile and its attendant implications for the country.

Atiku was reacting to the recent four-month fiscal performance report released by the federal government on Thursday.

Zainab Ahmed, Minister of Finance, Budget and National Planning, had in a report said that the federal government’s total revenue in the first four months of 2022 was N1.63 trillion, while debt service gulped N1.94 trillion.

She added that urgent action was required by the federal government to address revenue underperformance and expenditure efficiency at national and sub-national levels.

Atiku, who reacted to the development in a statement on Saturday, described the situation as worrisome, adding that it was indicative of the utter inability of the governement to manage its debt profile.

The former vice president condemned persistent borrowings used to finance irrelevant projects, charging the federal government on judicious deployment of borrowed funds among other solutions.

He said: “Thursday’s revelation by Nigeria’s Finance Minister that the cost of servicing Nigeria’s debt has surpassed the Federal Government’s retained revenue by N310 billion in the first quarter of the year is very worrisome.

“First, this action must be in breach of all known reasonable debt-sustainability thresholds. Second, it puts a big question mark on the capacity of the government to manage its rising debt profile without endangering macroeconomic stability.

“Indeed, I am concerned that this action is already exposing Nigeria to financial stability issues as we slip from a medium risk of debt distress to high risk of debt distress.

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“I had on several occasions warned that not only is the fiscal cost of government’s indiscriminate borrowing so enormous but has even greater opportunity costs as we sacrifice investments in critical areas, including education, health, and other basic services. This is certainly detrimental to Nigeria’s long-term growth.

“I urge the government to as a matter of urgency do the following: Take immediate steps to slow down the rate of debt accumulation by promoting more Public Private Partnerships in critical infrastructure funding and identifying more innovative funding options.

“Review the current utilization of all borrowed funds and ensure that they are deployed more judiciously.

“Specifically, government must ensure that all borrowed funds are for priority infrastructure projects that would generate income, boost output, and put the economy on the path of sustainable growth.

“Review the country’s debt strategy by focusing on concessional and semi-concessional sources with lower interest rates and relatively long-term maturity. The government must reduce the issuance of short-dated debt instruments.

“Take steps to improve its spending efficiency and drastically cut unnecessary and wasteful expenditures.”

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