Nigeria’s total debt profile hits 6 trillion naira

Senator Ehigie Uzamere
Chairman Senate Committee on Foriegn and Local debts

Nigeria’s total debt profile hits 6 trillion naira
Obiora Ani, Abuja 

Nigeria’s total debt now stands at a whopping 6.02 trillion naira, about 39.72 billion US dollars, of which external debt amounts to 5.398 billion dollars and domestic debt totals 5.210 trillion naira, barely five years after the full repayment of the country’s foreign debt.

These figures were announced on Friday at the inauguration of the Senate Committee on Foreign and Local Debts by its Chairman, Senator Ehigie Uzamere of the ACN, representing Edo State.

Senator Uzamere said the amount was “unsettling and calls for concern.”

Deputy Senate President Ike Ekweremadu however berated past regimes (the military) for borrowing on account of the country and abandoning the projects for which the loans were taken.

Infrastructure development

He said, “There is dire need for the executive to focus more on borrowing for projects with self-repaying capacity and job generation rather than borrowing to finance gap in budgets that are largely recurrent.”

He noted that while the total debt of 6.02 trillion naira is more than the Federal Government annual budget, its external component translates to 2.76% of the country’s Gross Domestic Product and its domestic component translates to 17.53% of GDP.

Global limit

Senator Uzamere further explained that with the 20.29% of GDP that the total debt constitutes in Nigeria’s economy, compared to global limit of 40%, “the country is on safe ground”,  but noted that 'more hard work and a serious approach' was needed 'to translate our debt into asset to accelerate our infrastructural development and boost the economy.'

He said he was however not comfortable with the Debt Sustainability Analysis (DSA) supplied by the Debt Management Bureau asserting that there were other Debt Sustainability Indices (DSI) that were more realistic and revealing than the Debt/GDP ratio.

Public Private Partnership

“Do we have the capacity to repay this money considering our yearly revenue profile? What is the future value of the total debt in 10 years’ time?” the senator asked rhetorically, and promised to engage the executive to generate good quality data for its DSA.

Moreso, Sen. Uzamere enjoined the government to wholly embrace Public Private Partnership (PPP) through adequate legal framework to safeguard workability of the scheme as it is a sure way to hasten the provision of infrastructure with less financial burden to the government.

“Unfortunately, due to inadequate information the provision for PPP in the Debt Management Office (amendment) Bill was rejected”, he lamented.

He said the National Assembly would revisit this issue and many others that were rejected in the Bill as a way of giving the necessary backing to effective debt management.

“It is our firm belief that no matter how effective our debt management is, without fiscal discipline, no meaningful success can be achieved; I therefore call on all tiers of government to be prudent, accountable and transparent in the management of our lean finances” .

Uzamere further added, saying, “the committee will do everything within its mandate to encourage institutional capacity; we will therefore initiate advocacy campaign for States to establish and develop their Debt Management Departments; we are mindful of the fact that a slack in one state alone can affect the entire country; after all, we have only one economy”.

 Uche Iheanacho/Ekata