The Minister of Finance of Nigeria, Zainab Ahmed, has disclosed that the country’s N24.9 trillion debt is not a problem as generally conceived by experts.
The Minister reportedly decried the insensitivity of experts concerning the debt situation of the country at a meeting with management staff of the Ministry of Budget and National Planning on Monday.
The debt narratives: Speaking at the meeting, the minister stated that despite the misgivings amongst experts over the rising debt profile of Nigeria, what the country faces now is a revenue problem rather than debt challenge.
The minister’s statement reads, “There is a lot of insensitivity around the level of our debt. I want to restate that our debt is not too high; what we have is a revenue problem.
“Our debt is still very much within a reasonable fiscal limit. In fact, amongst our comparative countries, we are the least in terms of borrowing.”
[READ MORE: Nigeria’s total debt stock rises to N24.9 trillion]
Ahmed also noted that in order to manage the revenue constraint, the Federal Government hoped to raise its revenue performance from the 55% that was attained in 2018 to 85% in the next four years. According to the minister, if the revenue performance is not raised, Nigeria will continue to suffer significantly in capacity to service the national budget.
Revenue coordination: While trying to provide explanations to the plans of the ministry, Ahmed stated that there’s a need for the Ministry of Budget and National Planning to effectively coordinate donor agencies that were operating in the country.
According to Ahmed, it was not ideal for the agencies to impose programmes on the country. Speaking on the development, the minister stated that a meeting would soon be convened, where the agencies would be summoned and issued directions on how to operate in the country.
“Donor coordination rests on the shoulders of this arm of the ministry. We want to call, as early as possible, a meeting of all donors so that we will discuss with them and give them a clear direction on what and where we want their intervention.”
Meanwhile, the minister has tasked the permanent secretary and directors in the ministry to brace up in delivering the mandate of the establishment, and as a result, would be held accountable for any failure.
A quick check: The minister’s reaction on the debt profile came after recent backlash on the Presidency over Nigeria’s rising debt profile by several institutions and Nigerians. Recall that the Accountant General of the Federation, Ahmed Idris earlier stated debt servicing currently being paid would not cause any problem to the economy, due to the government’s strategies to cushion the effect of the debt profile.
While Ahmed attempted to douse the tension of debt concerns, the cost of servicing existing debt profile is more worrisome. In 2018, Nigeria’s debt service was 54% of the total revenue.
An earlier publication by Nairametrics shows that debt servicing has so far gulped N7.04 trillion under President Buhari’s administration. In half of 2019 alone, Nigeria paid N293 billion to service external debt.