Former Vice President Atiku Abubakar has described as shocking the revelation that Nigeria spent 99 per cent of its revenue to service debt in the first quarter of 2020 under the watch of President Muhammadu Buhari.
In a statement entitled “Nigeria In Financial Crisis: Robbing Our Children to Pay for Our Greed”, the former vice-president said Nigerians should not be deceived because debt servicing does not equate to debt repayment.
“The reality is that Nigeria is paying only the minimum payment to cover our interest charges. The principal remains untouched and is possibly growing”.
“Nothing has shocked me in my entire life in public service as the revelation from Nigeria’s First Quarter 2020 financial reports in the Medium Term Expenditure Framework and Fiscal Strategy from the Federal Ministry of Finance, Budget, and National Planning, which shows, alarmingly, that whereas Nigeria spent a total sum of N943.12 billion in debt servicing, the Federal Government’s retained revenue for the same period were only N950.56 billion.
“We are at a precipice. If our revenue figures do not go up, and go up quickly, Nigeria risks a situation where our revenue cannot even sustain our debt servicing obligations. Meaning that we may become insolvent, and our creditors may foreclose on us, as has occurred in Sri Lanka and the Maldives.
“As part of an administration that paid off Nigeria’s entire foreign debt, I am concerned by the alarming and avoidable unprecedented increase in our debt to GDP ratio and debt to revenue ratio. The alarm I sounded last year is now sounding louder.
According to him, one of the measures that could help push Nigeria from this financial precipice, is for the country to sell the planes in the presidential fleet and also cut off wasteful spending.
“As a matter of utmost urgency and importance, I call on the Federal Government to take immediate steps to drastically reduce its expenditure, especially on wasteful projects, such as maintenance of the Presidential Air Fleet, and unnecessary renovations of buildings that could serve as is, limousine fleet for top government officials, overseas travels and treatments, and the N4.6 billion Presidential villa maintenance budget, etc.
“We cannot be on the verge of economic ruin, while still maintaining a Presidential Air Fleet that has more planes than the Presidential fleets of those from whom we take these loans. Our debt to revenue ratio paints a much more realistic portrait of our financial situation, especially as our revenues are majorly tied to a mono product, oil and gas, which are very vulnerable to global shocks,” he added.