Reactions as DMO Defends Nigeria’s Rising Public Debt
Unhappy Nigerians are reacting negatively to the rising debt profile which the Debt Management Office says is essential for capital expenditure and human capital developments.
Reacting to questions about what Nigerians feel about a total public debt of N40 trillion, some public policy analysts that spoke with MarketForces Africa said there has been no development anywhere in Nigeria.
“What do you mean about human capital development? Where are the infrastructure? University students are at home due to inability to fund education that is less than 10% of the total budget”.
There is nothing on the ground to shows Nigeria is moving forward, Okunola Tajudeen, a small business owner in Lagos told MarketForces Africa. “If I have my way, I want to ‘JAPA’.
In Akoka area of Lagos, many doctorate students also express displeasure about the rising debts and low impacts on citizens. They said while borrowing is not all that bad as painted by the media, there is a visible gap between the amount and what’s on the ground.
“I think Nigeria is borrowing to pay salary or to develop Northern region because I haven’t seen anything that worth the borrowing in the southern part of the nation where I am familiar with”, Kola Badmus, a Lagos-based consultant said.
President Muhammadu Buhari has borrowed about N30 trillion since 2015, and this amount excluded overdraft provided by the Central Bank of Nigeria under its Ways and Means window. The total amount has not been securitised, which means Nigeria’s public debt is understated.
MarketForces Africa reported that the Debt Management Office (DMO), said the country’s increasing debt profile is mainly used to finance Capital Projects and Human Capital Development.
The Director-General of DMO, Patience Oniha said this on Thursday in Abuja, while giving an update of the country’s debt profile. Oniha said that the various social challenges in the country, as well as global occurrences, had also increased the country’s debt.
“Borrowings are essentially for Capital Expenditure and Human Capital Development as specified in the Fiscal Responsibility Act 2007.
“Having witnessed two economic recessions, we have had to spend our ways out of recession, which contributed significantly to the growth in the public debt.
“It is unlikely that our recovery from each of the two recessions would have been as fast without the sustained government expenditure funded partly by debt,’’ she said. According to her, the insecurity situation has also resulted in increased borrowings.
“To compound matters, the country has technically been at war with the pervasive security challenges across the nation.
“This has necessitated massive expenditures on security equipment and operations, contributing to the fiscal deficit. Defence and security sector accounts for 22 per cent of the 2021 budget,’’ she said.
Oniha said that the most viable solution to the country’s fiscal challenge was to grow sources of revenue and plug all leakages.
“We must, however, continue to rationalise our expenditure as we cannot afford waste.
“In reality, our largest expenditure items are currently personnel cost, debt service and capital expenditure, which between them account for 85 per cent of the 2022 budget.
“There is very little scope for a cut in any of these over the medium term,’’ she said.
According to her, revenue generation remains the major fiscal constraint of the Federal Government.
“Systemic resource mobilisation problem was also compounded by the recent economic recessions.
“Several measures are being instituted under government’s Strategic Revenue Growth Initiatives to improve revenue and entrench fiscal prudence with emphasis on achieving value for money,’’ she said.
She, however, said that borrowing was not a bad thing as governments around the world borrowed whenever they needed to.
The director-general said that borrowing for infrastructure development did not also imply that the government was creating a burden for the future generations as the infrastructure would eventually be inherited and utilised by that generation.
DMO is doing its job, whether you like it or not, the agency must defend Federal Government, a policy analyst said in a chat. #DMO Defends Nigeria’s Rising Public Debt
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