Nigeria has debt issue, not revenue problem

A former governor of Anambra State, Peter Obi, has slammed the Federal Government over its mismanagement of the economy which snowballed into a recession in 2020.

Obi spoke during an interview with Arise TV on Monday, monitored by Ripples Nigeria.

The Minister of Finance, Budget, and National Planning, Zainab Ahmed on Friday, defended the incessant borrowings by the Federal Government, insisting they were instrumental to the country’s exit from recessions.

She said this during the Public Presentation and Breakdown of the 2022 Appropriation Bill.

“Having witnessed two consecutive recessions, we have had to spend our way out of the recession which contributed significantly to the growth of our public debts,” the minister stated in Abuja, one day after President Muhammadu Buhari presented the Appropriation Bill to the National Assembly.

“It is unlikely that our recovery from these recessions would have been as fast without the sustained government expenditure funded partly by debt,” Ahmed said.

READ ALSO: Peter Obi implores Nigerian govt to invest borrowed funds for infrastructural development

However, Obi countered the Minister’s claims stating that “Nigeria has a debt issue, not a revenue issue.”

According to him, “The first thing you do in a recession is to cut your costs. You can’t continue to spend as when things were aplenty. The Finance Minister talked about spending out of recession; what does that mean and what did it achieve? The prices of food are spiraling.

“If you must borrow in a recession, pump the money into critical areas which can cushion the effects. We are not like the USA. Nigeria borrows money for consumption.

He further questioned the mandate of President Muhammadu Buhari to increase revenue generation by 15 percent.

“Generating 15% revenue is not achievable. We have a debt problem; not a revenue problem. There is a link between pulling people out of poverty and increasing your revenue. You cannot have a majority in poverty and talk about revenue generation. A jobless populace cannot pay taxes — once the economy grows, the revenue sources will grow.

“We can even save while we borrow. This is what some of these developed countries such as Japan do.

“Give us specific projects that were revamped due to the borrowed funds. In the past six years, the current government has thrown more people into poverty than ever. I want to see the GDP that has shown how Nigerians are being pulled out of poverty,” the former PDP vice-presidential candidate noted.

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