Sir: I write in response to recent remarks made by the former Director General of the Securities and Exchange Commission (SEC), Arunma Oteh, at an event in Abuja, where she bemoaned Nigeria’s rising debt profile.
According to Reuters, Nigeria’s total public debt is projected to rise to N77 trillion this year from N44 trillion as at September last year due to new borrowings. This gives cause for alarm. We have returned to the pre-Obasanjo years when we had huge debts and spent a huge chunk of our income servicing those debts annually before we secured debt relief.
While not all of our public debt has been incurred by this administration, we cannot totally absolve it of blame because instead of reducing our debt profile, it was escalated.
In a country where 133 million people are multidimensionally poor, it is sad to note that a huge chunk of government revenue that could have been spent on infrastructure and the provision of social services to the poor and vulnerable, is spent on servicing debt.
Continuous borrowing will spell doom for generations unborn who will be saddled with huge debts that they cannot pay, and would be unable to service. It would also destroy the nation’s credit worthiness in the international financial community which would make her unable to secure new loans, no matter how pressing her needs may be. This could lead to social unrest especially when the government cannot pay wages and provide social services. Nigeria should learn from Greece which is yet to heal from the economic crisis which began 14 years ago due to huge debts which she was unable to pay or service.
The incoming administration has its work cut out for it. There are four things it needs to do. One, it should involve more of the private sector in the building of infrastructure instead of using loans. This can be done through build-operate-transfer (BOT), public-private partnership (PPP), tax credits, etc. Two, we need to put a total stop to subsidy payments for petroleum products. Three, we need to reduce the bureaucracy by eliminating multiple government agencies who perform the same functions. For example, the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices Commission (ICPC) are both doing the same job, so one has to give way for the other if we are serious about cutting the cost of governance. Lastly, the collection of Value Added Tax (VAT) should be the exclusive preserve of sub-national governments. This would reduce our overall debt burden as state governments are significant contributors to our total public debt.
•Peter Ovie Akus,
New Jersey, USA.