Politics

There is yet no cause for alarm over Nigeria’s $83billion debt – Federal Government

Lai Mohammed, the Minister of Information and Culture

Following former President Olusegun Obasanjo’s public condemnation of Nigeria’s rising debt profile, the Federal Government has said that President Muhammadu Buhari alone cannot be blamed for the country’s debt.

Lai Mohammed, the Minister of Information and Culture, in an apparent reaction to Obasanjo’s statement on Monday noted that Nigeria’s debt stock was a cumulative figure of borrowings by previous governments.

The minister said that there was no cause for alarm over the country’s $83billion debt, saying that Nigeria still operatives within its debt ceiling of 25% in total public debt stock to Gross Domestic Product.

Obasanjo had while speaking at the ‘Why I am Alive’ event in Lagos raised an alarm over the country’s impending bankruptcy over her current debt profile. He noted that the government was only creating worries for future generations who would have to pay the debts.

Lai Mohammed however noted that it was necessary to borrow at this time to meet the massive infrastructural decay.

“Recently, there have been concerns in certain circles about the country’s growing debt, both domestic and external. In the process, there have been some misrepresentations and scaremongering. We therefore believe it is important to put things in the right perspective, so our citizens will be well informed.

“The public debt stock is actually a cumulative figure of borrowings by successive governments over many years. It is therefore not appropriate to attribute the public debt stock to one administration.

“Nigeria’s total public debt stock in 2015 was $63.80bn, comprising $10.31bn of external debt and $53.49bn domestic debt. By June 2019, the total debt stock was $83.883bn, made up of $27.163bn of external debt and $56.720bn domestic debt. It is therefore not correct to say that Nigeria’s external debt alone is $81.274bn.

“There is yet no cause for alarm. This is because Nigeria has a debt ceiling of 25 per cent in the total public debt stock to Gross Domestic Product (Debt/GDP), which it has operated within. The ratio for December 31, 2018 and June 30, 2019 were 19.09 per cent and 18.99 per cent, respectively.”

“In the face of massive infrastructural decay, no responsible government will sit by and do nothing. This administration’s borrowing, therefore, is aimed at revamping our infrastructure, including roads, bridges, railways, waterways and power, to help unleash the potential of the nation’s economy. The loans for the educational sector will contribute to the development of our human capital while the loans for the agricultural sector will help the move to diversify the economy.”

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