The Federal Government has assured Nigerians that there is no cause for alarm over the country’s debt profile both domestic and external as being speculated by scaremongers.
Lai Mohammed, the minister of information and culture, gave the assurance on Monday, December 30, 2019, in Lagos while briefing newsmen on the major achievements of the President Muhammadu Buhari’s administration for the outgoing year
Mohammed said there were misrepresentations in the figures being pushed out in certain quarters about the debt profile, adding that the country had not reached its debt ceiling of 25 per cent in total public debt stock to Gross Domestic Product, GDP.
“Recently, there have been concerns in certain circles about the country’s growing debt, both domestic and external.
“In the process, there has been some misrepresentations and scaremongering.
“We, therefore, believe it is important to put things in perspective, so our citizens will be well informed,’’ he said.
According to the minister, it is not correct to say that Nigeria’s external debt alone is 81.274 billion dollars.
“The public debt stock is actually a cumulative figure of borrowings by successive governments over many years.
“It is therefore, not appropriate to attribute the public debt stock to one administration.
“Nigeria’s total public debt stock in 2015 was 63.80 billion dollars comprising 10.31 billion dollars of external debt and 53.49 billion dollars domestic debt.
“By June 2019, the total debt stock was 83.883 billion dollars, made up of 27.163 billion dollars of external debt and 56.720 billion dollars domestic debt,’’ he clarified
Mohammed said there was no cause for alarm because Nigeria had a debt ceiling of 25 per cent in the total public debt stock to Gross Domestic Product (Debt/GDP), which it had operated within.
He said the ratio for Dec. 31, 2018 and June 30, 2019 were 19.09 per cent and 18.99 per cent respectively.
The minister said that the debt service to revenue ratio had been higher than desirable, hence the push by the government to diversify the economy and increase oil and non-oil revenues significantly.
According to him, the government is also widening the tax base to capture more tax-paying citizens.
“In the face of massive infrastructure decay, no responsible government will sit by and do nothing.
“This administration’s borrowing, therefore, is aimed at revamping our infrastructure, including roads, bridges, railways, waterways and power to help unleash the potential of the nation’s economy.
“The loans for the education sector will contribute to the development of our human capital, while the loans for the agricultural sector will help the move to diversify the economy.
News Agency of Nigeria, NAN, recalls that former President Olusegun Obasanjo said Nigeria faces an impending bankruptcy, with the country’s external debt ballooning by 700 per cent in four years.
He raised the bankruptcy alarm recently at an event in Lagos tagged “The Nigerian Story “created by the chief executive of Eureka Productions, Caroline Moore.
The former President who was a keynote speaker at the event reportedly put Nigeria’s external debt at 81.2 billion dollars (about N24.947 trillion) from 10.32 billion dollars in just four years.
Obasanjo had claimed that Nigeria would need to commit half of its foreign earnings to servicing its current level of indebtedness.