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.
“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.”
Join the conversation
Support Ripples Nigeria, hold up solutions journalism
Balanced, fearless journalism driven by data comes at huge financial costs.
As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.
If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.
Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.
INVESTIGATION: How roadside foods endanger consumers’ life with trans fat in northern Nigeria
With an estimated 854,000 deaths in Nigeria, and 3,229 attributed to trans fatty acids (TFA) -related cardiovascular deaths, ADESOLA IKULAJOLU visited Nigeria’s...
INVESTIGATION: Untold story of Ondo oil producing communities battling poor health system
Access to quality healthcare is one of the nightmares of communities in Ilaje local government area of Ondo State. Despite...
FEATURE: Ogun residents, waste collectors trade blames, as refuse litter environment
TIJANI ABDULKABEER, a journalist from the University of Ibadan, during a recent trip to Sango Otta, Ogun State took a look...
INVESTIGATION: How online fraudsters siphon victims’ funds through ‘SportyBet’ platform
As Nigeria transits into a cashless society, the evolution also creates opportunities for internet scammers to take advantage of unsuspecting...
SPECIAL REPORT: Enugu govt watches as waste takes over state, threatens public health, environment
In this report, Arinze Chijioke looks at how delays in evacuation of waste in Enugu State encourages indiscriminate waste disposal, its health implications, and how...