As the Minister of Finance says, loans approved by NASS
By Gabriel Ewepu – Abuja
A nonprofit, ActionAid Nigeria, AAN and stakeholders on Friday expressed concern about volatile lending levels and the rising profile of the national debt under the Buhari-led administration and poverty that is increasing daily.
The national director of ActionAid Nigeria, Ene Obi, in a welcoming speech expressed his concern about the upward trend that the nation’s debt profile has assumed, as it continues to accumulate and close the fiscal space for the effective delivery of public goods .
According to Ene, as of December 31, 2020, data from the Debt Management Office (DMO) showed that the country’s total debt stock was N32,915,514.85t ($ 86,392.54 billion).
He explained that ActionAid is convening with other partners, including the Tax Governance and Justice Platform (TJ&GP), to drive commitments towards a tax structure that works for Nigerians.
Meanwhile, he noted that ongoing borrowing is clearly not sustainable in both the short and long term, but instead enslaves citizens and future generations.
He added that the Nigerian government must proactively muster the political will to reduce the size and cost of governance, fully fight corruption, close the leaks in revenue generation and utilization, as it makes no sense to give away one. much of “our resources in tax incentives, but continue to seek financing abroad and locally.”
She said: “It is in view of these that ActionAid is convening a National Dialogue on Increasing Public Debt, as an anti-poverty agency, ActionAid is concerned that if indebtedness continues unchecked, Nigeria’s efforts to address to their unemployment challenges, they fail The deficit of social services and infrastructure and the increasing incidence of poverty will be a mirage.
“It is also concerned that the country is not exploring other avenues such as blocking leakage of corruption, illicit financial flows, reducing the cost of governance, among others, as alternatives to unsustainable and conditional debt.
“Let us remember that in 2006 the Nigerian government obtained debt relief from the international consortium of creditors also known as the ‘Paris Club’. The key argument of the government then was the inability of the country to meet its development obligations due to its debt service obligations.
“At that time, the country was indebted to the Paris Club for a sum of US $ 36 billion. Giving the obligation to service the debt, which affected annual spending on education and health as argued by the President at that time, thus making it an unsustainable undertaking on the road to national development.
Despite misgivings about the large amount paid and its implication for the country’s resource base at the time, it was hailed as a moment that would allow a new approach to managing debt and financing development in more sustainable ways. for the country. As of December 31, 2020, data from the Debt Management Office (DMO) show that the country’s total debt stock is N32,915,514.85t ($ 86,392.54b).
“The upward trend is becoming worrying, as the debt continues to accumulate, it closes the fiscal space for the effective delivery of public goods and services, especially the delivery of services with a gender perspective, which exacerbates poverty and inequality. . As reported by the World Poverty Clock, Nigeria has overtaken India as the poverty capital of the world and the most vulnerable groups are women and children.
“However, unsustainable levels of indebtedness have become a major concern for stakeholders. In the recent Federal Internal Revenue Service tax dialogue, African Development Bank President Dr. Akinwunmi Adesina stated that Nigeria’s debt-to-GDP ratio will push debt service payments beyond 60% of revenue collected at the federal level. With the contraction of oil revenues, debt service payments represent the biggest risk for Nigeria.
“Local economic actors, non-state actors and the media have also continuously raised their voices, the main concern being the implication of their sustainability and the future financing of development in the country.”
However, in a keynote address delivered by the Minister of the Federal Ministry of Finance, Budget and Planning, Zainab Ahmed, represented by the Head of the Marketing Development Department, Debt Management Office, DMO, Monday Usiade, while declared the National Dialogue open, said that the loans by the Federal Government followed due process as the National Assembly approved and approved the budgets, including the money to be borrowed.
Ahmed praised ActionAid Nigeria for broadcasting the dialogue as it will provide an avenue to broaden the discourse on public debts in Nigeria.
She said: “The federal government welcomes this National Dialogue with the theme ‘Increase in public debt and challenge of national development.
“The government is also delighted that the purpose, among others, is to provide an avenue to broaden the discourse on Nigeria’s public debt, as well as to provide alternative public financing proposals that respond to the current socio-economic realities of the country and its people.
“As part of its mandate, the Debt Management Office, DMO, on behalf of the Federal Government has continued to provide relevant information on public debts to Nigerians on a regular basis.”
However, he acknowledged the fact that the debt profile is really increasing, “The government recognizes that the nation’s public debt is growing, and it is also important to add that all internal and external loans are approved by the National Assembly. before they contract, that is, the representatives of the people.
“The loans are approved in the budget that is used to finance the budget offices and other projects presented by the different ministries, departments and agencies of the government.
“As you may know, the federal government annually conducts and publishes debt sustainability analyzes on the public debt portfolio.
“The DMO exercise helps determine among others. The results of the DSO are used to prepare the national budget, then the budget is now presented to the National Assembly, who is responsible for the allocation, including the amount to be borrowed.
“The federal government also develops its medium-term budget management strategies on a regular basis. The NTDS helps establish public debt management objectives to ensure that borrowing operations are conducted responsibly and that the cost of listing the debt portfolio profile is within the rationale. “
He also explained the essence of why public debts are published: “Some of the reasons why the government publishes relevant information on public debts include transparency and accountability of the debt and generate a public discourse of this nature,
“Therefore, the federal government welcomes this national dialogue because it will contribute to the knowledge of public debt management in the country.”
In a goodwill message, the Governor of the Central Bank of Nigeria, CBN, Godwin Emefiele, represented by the Deputy Director of the Monetary Policy Department, Dr. Tawose Joseph, said that there is no crime in borrowing, but that it is monitored and evaluated the borrowed money. and the purpose for which it is intended.
Emefiele further stated that the CBN formulates policies that positively affect grassroots people, adding that Apex Bank considers facts and figures before formulating policies.
According to him, the CBN has launched 37 initiatives to positively affect the economy, but noted that there are challenges despite that.
He also alluded to the fact that there is a link between debt and poverty based on the theme of the National Dialogue, ‘Increase in public debt and challenge of national development’.
Also in a goodwill message, the National President of the Nigerian Labor Congress, NLC, Ayuba Wabba, represented by Rita Goyit, lamented that the profile of the national debt has caused poverty to rise, including a widening inequality gap. , and that people are living in extreme poverty, which is worryingly high.
Wabba said this has led to other vices challenging the security and peace of the country.
He also lamented the poor treatment of workers across the country as problems that plague them, especially the minimum wage debacle, where workers are not being paid what they should.