A managerial economist, Emmanual Abolo, has called on the Bola Tinubu-led administration to halt borrowing for at least six months and reduce lavish spending by his government.
The expert said this on Wednesday during an interview on the state of the country’s debt, aired on Channels TV.
Abolo’s comment was triggered by the country’s public debt rise by 24.99 per cent between December 2023 and March 2024.
The position of Nigeri’as debt released by the Debt Management Office (DMO) shows that debt rose from N97.34tn ($108.23bn) on December 31, 2023 to N121.67tn ($91.46bn).
“Excluding naira exchange rate movements in Q1 2024, only the domestic debt component of total public debt grew from N59.12tn on December 31, 2023, to N65.65tn on March 31, 2024,” the DMO said.
The increase in borrowing was used to finance part of the budget deficit and securitisation of a portion of the N7.3tn ways and means advances at the Central Bank of Nigeria.
But Abolo argued that the fall in the dollar value of the debt stock is a result of the depreciation of the naira not due to a debt reduction.
He said, “There is no significant decline in terms of public debt in dollar terms” adding the “burden of debt on Nigeria is very significant and worrisome”.
The economist said the number is huge, adding that the implication is that “We are in an abyss.”
He noted that the debt is putting “Nigeria in fiscal strain, crowding out public investments and leading to high currency risks.”
Abolo claimed that the country is borrowing to pay salaries.
He said, “That is the most worrisome aspect. It is the reality. When you have an emergency situation, you take emergency action. We have always argued that we should reduce the cost of governance. So, if you look at what is happening recently, people have aluded that if you look at the actions of government in terms of the types of funding and expenditure on certain items, you match that against what is happening to people. The question now is, must you borrow money to do all of these things?
“And the issue of transparency in governance is very important. If you say you borrowed N100bn, can you show us the benefits of the amount you borrowed? Can you be transparent to tell us the benefits in concrete terms?
“Let us reduce the cost of governance. Oronsaye’s report (The Steve Oronsaye Report ) is nowhere to be found after several leakages. Can we reduce the cost of governance? Must we borrow? Even if we don’t borrow in six months time, are we going to die? The answer is no. Let us step back and rethink the model.”