Some financial experts have expressed optimism that there is no cause for alarm over the country’s current debt profile.
They said this in separate interviews on Sunday in Lagos while reacting to the country’s rising public debt stock.
Details from the Debt Management Office show that the country’s total public debt stock has surged to N97.34 trillion as of the first quarter of 2023.
The total debt stock comprises domestic and external debts of the Federal Government, the 36 state governments and the Federal Capital Territory.
However, the Bola Tinubu government has borrowed N20.1 trillion from domestic investors in its first year, representing a year-on-year increase of 117 per cent from the previous year.
Nigeria is among the 10 countries on the continent burdened with the highest debt of 2.6 billion dollars owed to the International Monetary Fund, amid its economic challenges.
The multilateral body has projected Nigeria’s public debt to Gross Domestic Product ratio to reach 46.6 per cent in 2024, and 46.8 per cent in 2025.
The President Chartered Institute of Taxation of Nigeria, Mr Samuel Agbelaye said Nigerians should not despair over the recent loans obtained by the Federal Government.
Agbelaye said there was nothing wrong with obtaining loans if they would be used judiciously for developmental projects.
“Despite the rising debt, the country is yet a going concern and the indices and outlook of the economy are not as bad as people claim.
“The loans are not to be used for overhead but for developmental purposes that will add value to the economy,” Agbelaye said.
He said that Nigerians should not be too perturbed about the country’s public debt stock, or proposal to incur more loans.
“They should rather be concerned about ways the government plans to increase its cash flow to meet the projected revenue,” Agbelaye said.
Also, the Chief Executive Officer, of the Centre for Private Enterprises, Dr Muda Yusuf said despite the huge debt, it was almost impossible for the country not to borrow.
“The current loan expected to be secured by the government is part of the foreign borrowing plan of the 2024 deficit budget to bridge the financing gap.
“The foreign loan is usually more concessionary, the rates are low and it’s tied to specific projects,” Yusuf said.
He, however, noted that the Federal Government could reduce the need to borrow by raising its oil and gas output.
“Addressing the challenge of oil theft in the Niger Delta region is crucial in attaining the international oil quota,” Yusuf said.
Also, the former President, of Chartered Institute of Bankers of Nigeria, Mr Okechukwu Unegbu said the government should be more innovative in order not to further raise the country’s public debt stock.
“The government should explore more private equity financing to fix key infrastructure, so as not to borrow for every capital project.
“Countries in other climes utilise this model in addressing many developmental projects without approaching international developmental partners,” Unegbu said.
He added that the three tiers of government should cut down their ostentatious lifestyle.
“This will free funds for more developmental purposes so that the need to source foreign loans may reduce.
“Most foreign loans earmarked for developing countries come with a blueprint which is not the best for us as an emerging economy,” Unegbu said.
The Federal Government is proposing to incur more loans from international developmental partners.
The World Bank is poised to give the Nigerian government a loan of $2.5 billion for economic stabilisation and resource mobilisation reform programmes.
NAN
