Debt: Nigeria runs risk of sliding down slippery slope, expert warns

An economist and public finance expert, Cijeyu Ojong has warned that Nigeria’s public debt stock has been rising geometrically over the past few years and the country now runs the risk of sliding down the slippery slope into a debt overhang that could ruin the supposed gains of the historic $18 billion debt relief achieved in 2006.

That historic debt relief was some sort of tabula rasa that should have provided us as a country the opportunity to reset and perfect our debt management policies and strategies towards ensuring that funds are raised at the lowest cost and minimum risk to the government.

Consequently, proactive fiscal measures have to be urgently forged and timely action taken to rein in the current borrowing spree, if the ominous economic clouds hanging on the horizon are to be quickly dispersed.

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“Suffice it to say that real and present danger exists for the country around issues of fiscal sustainability, financial fragility, credit ratings and the threat to inter-generational equity that requires unwavering leadership commitment and technocratic diligence to forestall.

He stated that the issues of inter-generational equity have to be given serious consideration and prominence in policy-making to the extent that government is a continuum and held to be a corporation sole with the common seal and perpetual succession.

Ojong, who is also a chartered accountant explained that any debts incurred by one government automatically transfers to the next government and so on unto future generations.

“So, future generations are bound to be negatively affected by debt burdens incurred from current borrowing activities, especially where there are no corresponding infrastructure or social investments to show for the borrowings.