A business expert and Executive Director of OrderPaper Nigeria, Mr. Oke Epia, has said that Nigeria’s public debt rose from N12.8 trillion to N87.91 trillion between 2015 and 2023, representing a staggering 585% increase.
He said that there is a need for economic diversification and development of other sectors to ensure sustainable growth and reduce reliance on a single commodity.
Epia, disclosed this in Abuja, at the Private Sector Dialogue on Fiscal Responsibility and Debt Management. He expressed optimism that the amended Fiscal Responsibility Act (FRA) will positively impact Nigeria’s economy, driving growth and development.
The dialogue brought stakeholders from various sectors, facilitated insightful discussions and constructive exchanges on pressing issues related to fiscal responsibility, fostering a collaborative environment for knowledge sharing and solution-driven dialogue.
Epia said: “From the rise in Nigeria’s total debt stock at N12.85 trillion in 2015 to a staggering N87.91 trillion in September 2023. The bungled N22.7 trillion Ways and Means facility to the federal government, to the ever-changing forex rates, inflation, and economic hardships, current fiscal policy failures are evident.
“Recently, citizens have been met with a flurry of tax burdens, such as the removal of fuel subsidies, which has led to an over 300% increase in the price of fuel. Further, recently proposed cybersecurity levy of 0.5% has been met with public backlash, given the existing bank charges such as electronic transactions varying transfer fees, stamp duties at N50, N4 SMS charges per transaction, and Value Added Tax (VAT).
“Despite these streams of revenue generation schemes, the country’s public finance, debt profile and fiscal health continue to take a downward turn. On the other hand, the inflation rates have risen as high as 33.69 per cent in April 2024, as the National Bureau of Statistics (NBS) reported.”
In his remarks, the Chairman of the Fiscal Responsibility Commission (FRC), Victor Muruako, urged stakeholders to continue to leverage on possible platforms to exchange insights, best practices and innovative solutions that will propel towards a more resilient and prosperous future.
Muruako, represented by its Special Assistant, Chris Uwadoka, said: “This is another beginning of an amendment process. We have had attempts since the 7th Assembly. In the 9th Assembly, it perished at the Public Hearing Stage. We are confident that the process will run its full course this time around.
“The journey is still long. Therefore, I use this opportunity to urge all relevant parties, particularly the people here today to continue to throw their weight and voice behind this noble issue of the FRA amendment.”
Also speaking, the Chairman of the House Committee on National Planning and Economic Development, Isiaka Ibrahim, expressed his concerns that Nigeria’s reliance on crude oil is too great.
He said: “There is no country in this world, perhaps I want to be very modest, by saying that most economies of the world, in terms of the countries, are equally indebted. If I’m very right, it’s only that the ratios differ. Unfortunately, which I have stated at a different forum about our revenue generation, Nigeria, unfortunately, we rely heavily on crude oil as revenue.”
Ibrahim foruther noted that Nigeria still has the capacity to borrow more funds despite its current debt profile, adding that the country’s total internal and external debt, including non-bond borrowing, stands at $114 billion, having an excess of $138 billion in the size of the economy.
He drew comparisons with the World Bank, which has a total consolidated capital of $298 billion but only $19 billion in contributions from donor agencies and countries.
He said that Nigeria can still borrow from the World Bank, having netted off its $114 billion debt, leaving a surplus of $138 billion.”
