Nigeria’s Debt Hits $100bn, Stakeholders Express Concern

Stakeholders at the African Conference on Debt and Development (AFCODD) have raised concerns about Nigeria’s rising debt profile as the country’s debt stock stood at $100billion as of March 2022.

A breakdown by the Debt Management Office (DMO) revealed that as at 31 March 2022, external debt stood at $39billion while domestic debts stood at $60billion.

Of concern to them is that despite the Section 42(1) of the Fiscal Responsibility Act, 2007 that states “The President shall, within 90 days from the commencement of the Act and with advice from the Minister of Finance, subject to approval of National Assembly, set overall limits for the amounts of consolidated debt of the three tiers of government”, the debt limit has not been set.

They described it as unfortunate that since the enactment of the FRA in 2007, the consolidated debt limits of the federal, states and local governments have not been set by any President and this has worsened the debt management crisis.

The Executive Director of the African Network for Environment and Economic Justice (ANEEJ), David Ugolor, while speaking at the conference, also raised concerns over the inability the country to account for the $3.5billion Special Drawing Right (SDR) allotted to the country by the International Monetary Fund (IMF) in 2021 as a direct response to the economic crisis unleashed by the Covid-19 pandemic.

Ugolo lamented that the utilisation of the SDRs has been shrouded in secrecy with no information in public domain by the Federal Government neither is there parliamentary coverage of the SDRs issue in Nigeria.

To this end, he called on the National Assembly to hold a public hearing on the issue and invite the Minister of Finance, Budget and National Planning and the Governor of Central Bank to explain the use of $3.4bn SDR allocated by IMF since 23 August 2021 sitting idle in the CBN, as well as to explain the use of the $3.4bn Covid-19 facility granted by the IMF which has been fully drawn down.

Ugolor stressed the need for a pan-African approach to the SDRs contribution, allocation and management that takes into recognition the capacity to deliver greater public good to Africans.

Also speaking, the Country Representative of Policy House International, Taiwo Akerele, pointed out Nigeria’s borrowing appetite is one of the major reasons why the country is in debt crisis.

It was agreed that rather than encouraging further borrowings, Nigeria should leverage its rich resources through an enhanced Debt Recovery Management that knocks out illicit financial flows, profit shifting, tax evasion and avoidance, unbridled looting with impunity and unnecessary tax holidays.

He also lamented that the current Debt Servicing Strategy 2020-2023 is not inclusive as it does not reflect modern day reality and lacks a broader citizen and CSO inclusive approach just as most of the baseline underpinning the strategy such as real GDP, oil production volume and continued reliance on Debt/GDP ratio no longer hold.

Akerele said there is the need for immediate review of Nigeria’s debt strategy and policies to make them inclusive with civil societies’ involvement in loan contraction and monitoring processes.

A communiqué issued at conference, however, called for the need to sustain interrogation of the international financial system as the multilateral financial institutions were established and managed in ways and manners that stifle the growth and development of the south, including Nigeria.