The rise of our national debt has continued to become a matter of great concern .Since the inception of this administration, it has been reaching to both domestic and foreign creditors for loans. Of course, Nigerians can excuse the government for starting on wrong footing. Immediately after the 2015 general elections, the incoming government discovered that the country was broke. Added to the woes were the crash of crude oil price in the international market and violent militant activities in Niger Delta that seriously affected or nearly shut the oil production output. The financial recession which bit hardest in the first quarter of 2015 and down to 2017, respectively, had put many states in financial distress. It took the intervention of federal government through the financial bail out to save the situation from further deteriorating. The states government lived from hand to mouth as they hardly meet their financial obligation. Within a shortest period of time, workers unpaid salaries were accumulated and contractors who executed projects looked aloof with their hands akimbo for not being paid.
It may interest you to know, the APC government came to power under the changes mantra and was desirous to implement infrastructural developments in the country. In view of the urgency it attached to socio-economy drive, it has no option than to look at nooks and corners to source for loans. The government went to China, American, Russia, etc and obtained or collected billions of dollars to fund its infrastructural development. The rising demand for loans pushes our internal and external debt profile to frightening dimension. From the relatively $10 billion this government inherited in 2015, the country’s debt now stands at above $80 billion and could further rise once the senate approves Mr President new loans request rejected by the last senate.
Though, the Minister of Finance, Zainab Ahmed, had said in various fora that Nigeria has the lowest debt profile and Debt Management Office (DMO) allayed fears being expressed by Nigerians, the increasing rise of debt is worrisome. It is reported that half of the country’s budget goes to servicing or re-payment of debt. If the narrative is true, it means the country will be left with little or virtually nothing for its development. During Obasanjo regime, the country re-negotiated its loans with international creditors. This led to exit from Paris Club. Succesive regimes after Obasanjo had also managed the country’s debt to minimal or acceptable level.
There is nothing wrong for collecting loans so long it will be utilised. If the loans will be wisely invest to yield an investment return. For instance, the modernisation of rail transport system is a right step in the right direction. What about an investment in oil sector in which the country has comparative revenue advantages? But, collecting loans to maintain our money guzzling democracy or our over-floated bureaucracy can be considered as wrong decision. Besides, these loans attract interest rate and usually come with stingy conditions. That is why the government should always think twice before rushing for loans. With the introduction of new tax regime and other policies such as border closure targeted at revenue drive, the government should avoid taking the country to another debt trap through unnecessary collection of loans!
Ibrahim Mustapha,
Pambegua, Kaduna state
08169056963
