Nigeria’s public debt has surged from N12.8 trillion in 2015 to N87.91 trillion in 2023, marking a staggering 585% increase. Business expert and Executive Director of OrderPaper Nigeria, Oke Epia, highlighted this alarming growth at the Private Sector Dialogue on Fiscal Responsibility and Debt Management.
Epia emphasized the urgent need for economic diversification to ensure sustainable growth and reduce reliance on a single commodity. “From the rise in Nigeria’s total debt stock at N12.85 trillion in 2015 to a staggering N87.91 trillion in September 2023, the fiscal policy failures are evident,” he said.
He noted the impact of recent economic policies, including the controversial N22.7 trillion Ways and Means facility to the federal government, fluctuating forex rates, inflation, and increasing economic hardships. Citizens face higher taxes, including the removal of fuel subsidies, which led to a 300% increase in fuel prices. Additionally, a proposed 0.5% cybersecurity levy has sparked public backlash amid existing bank charges and value-added taxes.
Epia pointed out that despite various revenue generation schemes, Nigeria’s public finance, debt profile, and fiscal health continue to decline. The National Bureau of Statistics reported an inflation rate of 33.69% in April 2024.
Victor Muruako, Chairman of the Fiscal Responsibility Commission (FRC), urged stakeholders to use all available platforms for exchanging insights and best practices. Represented by his Special Assistant, Chris Uwadoka, Muruako stressed the importance of the amended Fiscal Responsibility Act (FRA) in fostering a resilient and prosperous future.
“This is another beginning of an amendment process. We have had attempts since the 7th Assembly. In the 9th Assembly, it perished at the Public Hearing Stage. We are confident that the process will run its full course this time around,” Muruako said. He urged all relevant parties to support the FRA amendment.
Chairman of the House Committee on National Planning and Economic Development, Isiaka Ibrahim, expressed concerns about Nigeria’s heavy reliance on crude oil. “There is no country in this world, perhaps most economies, that are not indebted. Unfortunately, our reliance on crude oil for revenue is too great,” he said.
Ibrahim noted that Nigeria still has the capacity to borrow more funds despite its current debt profile. The country’s total internal and external debt, including non-bond borrowing, stands at $114 billion. He compared Nigeria’s situation with the World Bank, which has a total consolidated capital of $298 billion but only $19 billion in contributions from donor agencies and countries.
“Nigeria can still borrow from the World Bank, having netted off its $114 billion debt, leaving a surplus of $138 billion,” Ibrahim stated.
The dialogue brought together stakeholders from various sectors for insightful discussions and constructive exchanges on fiscal responsibility. The event fostered a collaborative environment for knowledge sharing and solution-driven dialogue.
Source: The Guardian
