NIGERIA has been groaning under the burden of a rising national debt for several years now. Even though Muhammadu Buhari and Yemi Osinbajo made audacious pledges in 2015 to solve Nigeria’s debt problem, the Buhari-Osinbajo administration has only managed to pile up more debt in 6 years.
The Debt Management Office reported that Nigeria’s public debt was ₦38tn at the end of the third quarter of 2021, with the total debt stock rising by ₦2.540tn in just three months. President Buhari has been very brave to ask for loans by the billions but economic experts are concerned about management of such borrowing if he cannot guarantee that the country will not pay back loans under tougher conditions.
At Nigeria’s current rate of national debt increase, Muhammadu Buhari would lead the country to a ₦12tn debt profile in two years from 2021 to 2023. Even though the federal government targets a reduction in total public debt by 2025, Buhari would have been out of office long enough to be absolved of whatever calamity his borrowing spree causes. This is exactly what should not happen. Every administration should aim to maintain or reduce the country’s debts in order to hand over a less chaotic economic situation to a new president.
It is believed that developing countries must rely on borrowing in order to support projects that will pave the way for long-lasting development. However, borrowing must be moderate enough and sustainable. The borrowing country must be serious about creating infrastructure and acquiring assets that will justify the debt.
Nigeria has to be careful with its increasing debt profile which is becoming a thing of concern. Buhari’s borrowing habit is worrisome, it is as though little efforts are made to think of other ways of generating revenue. Instead of resigning the country to a debt figure of ₦50tn by 2023 —two years before that time— Buhari can seek more public-private partnership. Public-private partnership projects can be built and operated for a period of time before generating revenue for the country. Unfortunately, we did not get to see enough of these projects Nigeria needed so much from the get-go.
Instead of always borrowing money to fund every desire of the federal government, Nigeria can actually demand repayment from those indebted to the country. It is surprising that NEITI recently detected some money being held by some wealthy individuals that runs into trillions of naira. We cannot have such funds hanging in space will the country struggles to pay its current debt. What about all the looted funds the federal government is committed to recovering and utilising?
It seems the Buhari-led government is borrowing so much because it sees loans as a somewhat easy way out of revenue generation problems. Buhari thinks we have a revenue problem but sees no other way to solve that problem than to borrow more funds than the country should afford. If one thinks hard about it, the federal government of Nigeria has been borrowing irresponsibly and mortgaging the future of the youth of the country. This has to stop. Buhari and his ministers may be creating a financial damage too difficult to repair in the foreseeable future. It is shameful that a government with so much promise a few years back is now doing everything to borrow as much as they can before 2023 and then walk away from an economic conundrum they created.
