…says commitment taking huge toll on GDP
…advises on sectors to boost revenue
The Council of the Lagos Chamber of Commerce and Industry (LCCI) has raised serious economic concerns over Nigeria’s rising debt service payment, saying in half year 2021 alone, the country’s debt service to revenue ratio hit about 98 per cent, up from 83 per cent recorded in 2020. With this, LCCI explained that it was time the present administration under President Muhammadu Buhari started taking practical steps to boost revenue and foreign exchange inflows into the fragile economy to save the country’s financial situation.
Director-General of LCCI, Dr. Chinyere Almona, in a press release made available to New Telegraph on Sunday, said that the LCCI council, at its meeting, deliberated on what practical steps can be taken by government to boost revenue and foreign exchange inflows, following the rising debt service payment.
She stated that government had increasingly resorted to debt to finance recurrent and capital obligations in the face of dwindling revenue. The LCCI DG added that the country’s debt situation had become worrisome with debt servicing consuming a significant share of the revenue. She said: “At the council meeting of the Lagos Chamber of Commerce & Industry in Lagos, there were deliberations, Nigeria’s fiscal and financial challenges have been of concern to several stakeholders, including LCCI. “Government has increas-ingly resorted to debt to finance recurrent and capital obligations in the face of dwindling revenue.
The country’s debt situation has become worrisome with debt servicing consuming a significant share of the revenue. “The debt service to revenue ratio for the period of January to May 2021 stood at about 98 per cent up from 83 per cent recorded in 2020 according to the budget implementation report. “Nigeria is an asset-rich nation owning hundreds of large state-owned companies, valuable parcels of land, and built structures in prime commercial locations. “These assets are grossly underutilised and contribute too little to the country’s fiscal and financial situation because their market values are currently not known.
“There is, therefore, a need for government to take urgent steps to establish the market values of the assets, securitize the corporate assets and commercialise the real estate assets to raise revenue for the government and foreign exchange inflows for the country. “There is a need to replace existing debt stocks with asset-linked debt to ease the debt servicing burden; attract greenfield FDI into publiclylisted state-owned companies; generate new revenue streams from commercialized real estate portfolios.” Given the challenges highlighted above, the LCCI DG noted that the Chamber wished to propose to government at both federal and state levels the need to identify public assets, saying Nigeria needs to do an official identification of its assets in terms of location, purpose, and usage contained in a national asset register.
“There are four types of assets, namely: Corporate assets – such as refineries, state-owned enterprises. Physical assets- such as government land and built structures. Intangible assets – such as the GSM licensing and pension funds, Human capital – a national pool of high-return skills. “An asset register that provides detailed information about Nigeria’s assets at national, state and local government levels must be created. “Determine the worth of these assets: Corporate assets should be securitized via public share issuance to raise equities.