Debt burden, others impacting negatively on investments in humanity –Buhari tells World leaders
The Federal Government has issued N1.5 trillion worth of Promisory Note to settle future mature liabilities, Director General, Debt Management Office (DMO), Ms. Patience Oniha, confirmed on Tuesday during the concluding session of Nigerian Economic Summit (NES) in Abuja. The instrument, Oniha said, was endorsed by the National Assembly.
A Promissory Note is a legal instrument, in which one party promises in writing to pay a determinate sum of money to the other, either at a fixed or determinable future time or on demand of the payee, under specific terms. Speaking as a panelist on the topic: “Sustainable approaches to public debt financing,” at the event, the DMO boss clarified that every borrowing was done in accordance with the Fiscal Responsibility Act, adding that total debt stock data published by DMO was inclusive of Federal Government, the 36 states and the Federal Capital Territory (FCT). Nigeria’s total debt stock currently stands at N35. 46 trillion as at the end of second quarter 2021, according to DMO. Speaking on debt stock in relation to revenue, DMO DG said: “We can’t talk about debt alone, we must also talk about revenues. When you borrow and invest these monies wisely, it will enhance growth and development which is why we have issued promisory notes of N1.5 trillion approved and approved by the National Assembly.
“To include any debt data in the country’s debt stock, it has to be approved by National Assembly and Federal Executive Council,” she said. However, Oniha admitted that debt service to revenue was high and called for diversified ways of growing revenue to invest in the future. Also in his contributions, Africa Tax Lead at PwC, Taiwo Oyedele, believes that debt has never been Nigeria’s problem, while asserting that revenue challenges is what has brought Nigeria to the current economic challenges it is facing.
“Unsustainable debt burden is a symptom, which is characterised by low revenue or high spending or a combination of both. “As such, what is important for Nigeria is a national integrated revenue spending and debt management strategy because we need concerted efforts to grow out revenues,” he noted. Oyedele also disagreed with some policies of the Federal Government that about 60 MDAs should generate revenue, saying it was impossible for that number of agencies to be involved in revenue collection. Also speaking, Funsho Akere, CEO, Stanbic IBTC Capital, believes that Nigeria only has a revenue problem, adding that “government can’t change the quantum of debt stock, but it can focus on critical infrastructure that will drive growth and improve it’s revenue generation mechanisms.” Earlier in his presentations, the Chief Economist at NESG, Dr. Segun Omisakin, attributed high overhead cost, over reliance on oil and gas commodities as the major drivers of debt.