President of the African Development Bank Group (AfDB), Dr. Akinwumi Adesina, says Nigeria’s debt situation is worse than what many people think, urging the country to take more proactive steps in harnessing its resources, and not depend on foreign loans.
Adesina who spoke on Tuesday, said Nigeria’s debt service to revenue ratio is high at 73%, urging the government to decisively tackle the challenge.
Recall that President Muhammadu Buhari in his budget presentation to the National Assembly, Buhari said his administration believed that Nigeria’s debt debt level is still within sustainable limits, adding that borrowings are to specific strategic projects and can be verified publicly.
But arguing from a different perspective, Adesina said Nigeria must decisively tackle its debt challenges.
“The big issue is how to service the debt and what that means for resources for domestic investments needed to spur faster economic growth.
“The debt service to revenue ratio of Nigeria is high at 73%. Things will improve as oil prices recover, but the situation has revealed the vulnerability of Nigeria’s economy. To have economic resurgence, we need to fix the structure of the economy and address some fundamentals.
As of June 30, 2021, the country’s external obligations stood at $33.468 billion, according to the Debt Management Office (DMO).Domestic debt was $53.2 billion. In Naira terms total national debt was N35.5 trillion.
Akinwumi further stated that what was needed for sustained growth and economic resurgence is to remove the structural bottlenecks that limit the productivity and the revenue earning potential of the huge non-oil sectors.
“Nigeria should significantly boost productivity and revenues from its non-oil sector, with appropriate fiscal and macroeconomic policies, especially flexible exchange rates that will enhance international competitiveness,” he said, according to a newspaper report.
Adesina also further stated the government should not be decongesting the ports in Nigeria, rather “we should be transforming the ports.
“This must start with cleaning up administrative bottlenecks, most of which are unnecessary with multiple government agencies at the ports, high transaction costs or even plain extortions from illegal taxes, which do not go into the coffers of the government.
He also said it is not the lack of rain that is leading to low food production.
“Mr. President, the main reason is that farmers no longer have access to quality improved seeds, fertilizers, and farm inputs at scale.
Farmers across the country are asking for the Federal Government to restore in their words “the popular Growth Enhancement Support Scheme and the e-Wallet system.”
“I would like to urge, Your Excellency Mr. President, to re-launch the ‘Growth Enhancement Scheme’ and the e-wallet system and put millions of farmers at the heart of agriculture — at scale. If this is done, and run well, I can assure you that you will see a dramatic turnaround in national food production,” he added.