As Nigeria’s 60th independence approaches, some citizens have cautioned the Federal Government on its endless resort to foreign borrowings to fund budget deficits.
Some economic stakeholders expressed concern that the country remained dependent on oil as the sole revenue generating resource for such a long time without diversification to other revenue generating sources.
The economists, called on government to take immediate steps at diversifying the economy and stop unending foreign borrowings.
It will be recalled that the Debt Management Office (DMO) recently revealed in a statement that the country’s total debt profile presently stood at N31.009 trillion, which include that of the federal government, the 36 states and the FCT.
The DMO said the 2020 budget had to be revised due to the adverse effect of COVID-19 on government revenue.
According to Mr Tope Fasua, an economist and founder of Global Analytics Consulting Ltd, the effect of the COVID-19 pandemic is propelling governments across the globe to borrow more.
Fasua, however, said the Nigerian debt situation was worrisome because a chunk of government revenue now went into debt servicing.
“Recently, we saw that about 13 of our 36 states, including Lagos are bankrupt due to huge debt burden. Though our debt level is still within manageable limits, we should be worried because in August, for instance, 99 per cent of government revenue went into debt servicing”.
He said the country’s economy had under-achieved since independence, describing it as a “toddler economy”.
Fasua advised government to deploy revenue strictly for public good and cut down on unnecessary, recurrent expenditure to save cost and reduce borrowings.
Mr John Olusola, a pensioner said if successive Nigerian leaders had managed the economy well, the country would not need to resort to foreign or local loans to fund its budgets.
“Anytime I hear the huge debt burden of the country, I become worried. Nigeria is so endowed that if successive leaders had managed the economic well since independence in 1960, the country will even be in the position of a global lender, not borrower. Our leaders should device quicker means of diversifying the economy and boosting revenue generation rather than going cap in hand all the time to borrow”.
Mr Ahmed Yahya, an economist, advised government to save more money by looking inwards to curb wastage and reduce cost of governance.
“If government sincerely diversifies the economy to areas like agriculture, solid minerals, tourism and other emerging economic sectors, resorting to foreign borrowings will be reduced. There is also the need to curb corruption and reduce the heavily staffed government bureaucracy to cut recurrent expenditure and save money for infrastructure”.
Mrs Felicia Okonkwo, a retired headmistress said it was wrong for government to bequeath a burden of huge debts on coming generations.
“It is sad that Nigeria’s economy can be this challenged in spite of the country being blessed with huge natural and human resources. By independence in 1960, agriculture was the mainstay of the economy and so many achievements were recorded with it until crude oil was discovered. It appears now that crude oil has turned out to be a curse rather than a blessing as oil wealth has been frittered away by successive governments, while the country remains poor and underdeveloped. I call on government to stop this culture of unending borrowings so that our children are not made to inherit an unmanageable debt situation when they start to lead”.
The country’s debt profile remained low until 1977, when the outstanding growth rate in the country’s debt became manifest.
By December 2005, Nigeria became one of the most heavily indebted countries in the world, owing the sum of 33.9billion dollars.
The country, however, got debt relief in 2006, when the Paris Club of creditors wrote off 18billion dollars of that debt, while the country paid off the balance and became largely debt free.
The country has strangely, returned to the high indebtedness status after that reprieve, and many Nigerians are expressing worry about this situation.
