No cause for alarm over rising debt – FG

The Federal Government on Monday defended Nigeria’s rising debt profile, saying that those warning that the over $83.8 billion domestic and external debt signposted danger for the economy as scaremongers.

Minister of Information and Culture Lai Mohammed said that there were misrepresentations in the figures being bandied in certain quarters on the debt profile. Mohammed argued that Nigeria had not even reached its debt ceiling of 25 per cent in total public debt stock to Gross Domestic Product (GDP).

Former President Olusegun Obasanjo had earlier said that Nigeria faced impending bankruptcy  with its external debt ballooning by 700 per cent in four years.

But highlighting the achievements of the Muhammadu Buhari-led administration in the last one year, Mohammed said it was wrong for some people to assume that the government was responsible for the nation’s rising debt portfolio.

He said: “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.

“The debt service to revenue ratio has however been higher than desirable, hence the push by the government to diversify the economy and increase oil and non-oil revenues significantly. The government is also widening the tax base to capture more tax-paying citizens. 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.”