The Central Bank of Nigeria (CBN) has made it clear that Nigeria cannot stop borrowing, especially when borrowing is necessary as a part of fiscal responsibility.
The CBN Governor, Mr. Godwin Emefiele, said this on Friday in Abuja at the National Dialogue on the Nigeria’s rising debt profile, titled: “The Rising Public Debt in Nigeria and the Challenges of National Development” organised by the ActionAid Nigeria (AAN).
This is as AAN and stakeholders, expressed worry over unstable levels of borrowings and rising national debt profile under the President Muhammadu Buhari-led administration and rising poverty level.
According to Emefiele, represented by the Assistant Director, Monetary Policy Department, CBN, Dr. Tawose Joseph, there is no crime in borrowing, but that there should be monitoring and evaluation of the money borrowed and the purpose meant for.
“Debt is part of fiscal responsibility. Debt is never a crime or a sin. Private entity also burrows to survive. But what matter most is the quantum of the debt and the usage of the debt as well. If a money is burrowed as a result of shortage of income generation.
“When you compare the income and expenditure and is efficiently used is part of government responsibility. But where the fear is when it is above the threshold. CBN understand that when there is crisis in an economy, then the burden of debt would be something. That is why the conventional and non-conventional instruments is there to ensure price stability in the economy,” he said.
He added that the CBN formulates policies that positively affect the grassroots people, and added that the Apex Bank considers facts and figures before making policies.
He said that the CBN has rolled out 37 initiatives to positively affect the economy, but noted that there are challenges despite that intervention.
Stakeholders had earlier cried out over the rate of unstable borrowings and rising debts as the AAN Country Director, Ene Obi, expressed worry over upward trend in the nation’s debt profile, which she said keeps piling up and closing the fiscal space for effective delivery of public goods.
According to her, as at 31 December 2020, data from the Debt Management Office (DMO) showed that the nation’s total debt stock stood at N32, 915,514.85trn ($86,392.54 billion).
Obi said continued borrowing is clearly not sustainable both in the short and the long-term but rather enslaving the citizens and future generations.
She said the Nigerian government needs to proactively garner the political will to reduce the size and cost of governance, fight corruption, close leakages in the revenue generation and utilization as it makes no sense at all giving away large chunk of “our resources on tax incentives but continue to seek funding abroad and locally.
In her keynote, the Minister of Finance, Budget and Planning, Mrs. Zainab Ahmed, represented by the Head, Marketing Development Department (MDD), Debt Management Office (DMO), Mr. Monday Usiade, said the borrowings by the Federal Government followed due process as the National Assembly approved and passed budgets including monies to be borrowed.
She also commended AAN for conveying the dialogue as it will provide an avenue to broaden the discourse about public debts in Nigeria.
