The Federal Government has said the apocalyptic scenarios on the
country’s debt profile, as painted by former Vice President
Atiku Abubakar in his statement on Tuesday, is nothing but
scaremongering anchored on a false premise.
In a statement in Abuja on Wednesday, the Minister of
Information and Culture, Alhaji Lai Mohammed, said while the Federal
Government welcomes constructive criticism, such must be based on
verifiable facts rather than conjectures and innuendos.
”There is no doubt that former Vice President Atiku Abubakar loves
our country and wishes it well, otherwise he would not have sustained
his serial quest for the country’s highest position. One can only hope
that his resort to the use of such words as ‘precipice’, ‘foreclosure’
and ‘economic ruin’ does not reflect anything but best wishes for the
country at this time,” he said.
Mohammed said the figure of Nigeria’s debt to revenue ratio of
99% in the first quarter of 2020, quoted by the former Vice President,
is not in the Medium-Term Expenditure Framework and Fiscal Strategy
Paper, where he claimed he got it from.
”We are also not able to ascertain the source of the first quarter
figures of N943.12 billion for debt servicing and N950.56 billion for
retained revenue, which he also quoted,” he said..
The Minister said the debt service provisions in the annual budgets
include principal repayments, interest payments and all other
applicable charges, adding: ”Therefore, the statement that debt
servicing does not equate to debt repayment is not only wrong, but
ill-informed.”
On the former Vice President’s assertion that revenue needs to go up,
he said “this Administration has introduced several measures to shore
up revenues”, listing some of the measures as the passage and
implementation of the Finance Act, 2019, various on-going reforms in
the Oil and Gas, Tax Administration and Collections, as well as the
Strategic Revenue Growth Initiatives.
Furthermore, Mohammed said since Nigeria’s debt service is
expressly provided in the annual budgets and the debt service payments
are made as and when due, the issue of creditors foreclosing on
Nigeria, as strangely predicted by the former Vice President, does not
arise.
He said contrary to the statement credited to Abubakar that
Nigeria has experienced alarming and unprecedented increase in the
ratios of debt to GDP and debt service to revenue, indeed, Nigeria’s
ratio of debt to GDP is one of the lowest in the world at 19.00% as at
December 31, 2019, while Government is making concerted efforts to
increase revenue so as to bring down the ratio of debt service to
revenue.
”One of the reasons debt service to revenue is high is because
revenue generation in Nigeria has been low, with over-dependence on
the oil sector. This is corroborated by the fact that the ratio of
Nigeria’s tax revenue to GDP is one of the lowest in the world at
about 6%,” the Minister said.
He said unlike what obtained in the past, when the nation borrowed to
service the crass indulgence of a few fat cats, the loans being obtained by the current Administration are being
primarily used to finance infrastructure projects, which include
roads, railways, bridges and power, and the loans are long-term in
nature, which would benefit present and future generations.
”We have said that in the face of massive infrastructural decay, no
responsible government will sit by and do nothing. This Administration’s borrowing, therefore, is aimed mostly at revamping our infrastructure. The loans for the educational sector will contribute to the development of our human capital while the loans for the agricultural sector will help the move
to diversify the economy,” Mohammed said.
He said despite the negative impact of the Covid-19 pandemic on the
country’s economy, the Federal Government has continued to take
measures to mitigate the effects of the pandemic, and assured that the
Government will always act in the best interest of Nigerians.
