The Senate yesterday put the Nigeriaâ€™s total debt profile at N33 trillion after its approval of $22.7 billion foreign loan for the federal government penultimate week.
This is just as the Director-General of the Debt Management Office (DMO), Mrs. Patience Oniha, expressed concern that economic effects of the Coronavirus pandemic may incapacitate the country from effectively servicing the debt.
Vice Chairman of the Senate Committee on Foreign and Local Debts, Senator Muhammad Enagi, who made Nigeriaâ€™s current debt profile known at a public lecture with the theme â€śPublic Debt in Nigeria: Trend, Sustainability and Management declared that from a low ratio of debt to gross domestic product (GDP) of about 3.4 per cent at independence, Nigeriaâ€™s total public debt as at September 30, 2019 according to the Debt Management Office (DMO), stands at about N26.2 trillion (or $85.4 Billion).
â€śOf this amount total domestic debts is about N18 trillion (or $58.4 billion) which is 68.45 per cent of the total public debts. With the recent approval of the 2016-2018 External Borrowing Plan, the total debt stock would be about N33 trillion and 21 Debt/GDP ratio.
â€śThe big question in the minds of average Nigerian aware of this fact is what did we do with the money? In other words, where did the money go? What do we have to show as a people for these huge debts accumulated over the last four decades or so?â€ť the Senator asked.
He explained that borrowing has always served as veritable financial platforms for many countries of the world in running their economies but judiciously utilising such loans for intended projects and servicing the debts appropriately have also been problems for developing countries like Nigeria.
According to him, realities on the ground in the country in terms of required infrastructures and debts accumulations between 2006 and now appear disjointed.
The very reason, he explained, many Nigerians are worried whenever they hear that their government seeking for one loan or the other.
He added that in stopping the ugly trend, the Senate and by extension, the National Assembly , is more than determined to monitor the executive on prompt utilisation of new loans being sought for, in saving the country from going back to pre-2005 and 2006 debt burden era.
â€śConsequences of these borrowings are that the sheer magnitude of the nationâ€™s annual debt servicing put at about N2.47 trillion for 2020 makes the provision of basic but essential amenities and infrastructure in the country, almost impossible without further borrowings.
â€śClearly, Nigeria needs to get its public finance in order to avoid the potential fiscal and financial crisis ahead of the nation.
â€śThe current debt situation in Nigeria needs to be properly managed and every borrowed Naira or Dollar, carefully deployed, especially in the face of the continued dependence of the nationâ€™s economy on exported crude oil, with its usual price volatility.
â€śBorrowings must be project tied and not just to support budget deficit. Furthermore, the projects must be such to grow the economy and bequeath laudable infrastructure and not debt for future generations.
â€śThe government must improve on its Internally Generated Revenue (IGR) its Foreign Exchange Earnings and reduce importation of unnecessary goods. To this end, the 9th National Assembly will ensure very effective oversightâ€ť
However, Oniha, in her remarks, said there was no cause for alarm as regards the total budget profile of the country which peaked at $85.390billion or N26trillion as at September 2019.