Stakeholders Express Concern as Nigeria’s Debt Hits $100 Billion | The Guardian Nigeria News
…question the government’s inability to account for $3.4 billion in SDR funds
Stakeholders at the African Conference on Debt and Development (AFCODD) have raised concerns over Nigeria’s rising debt profile, with the country’s outstanding debt standing at $100 billion in March 2022.
A breakdown by the Debt Management Office (DMO) found that as of March 31, 2022, external debt stood at $39 billion while domestic debt stood at $60 billion.
What concerns them is that despite Section 42(1) of the Fiscal Responsibility Act 2007 which states that “the President shall, within 90 days of the coming into force of the Act and with the advice of the Minister of Finance, subject to the approval of the National Council Assembly, has set aggregate limits for the amounts of consolidated debt of the three levels of government”, the debt limit has not not been fixed.
They described as regrettable that since the enactment of the FRA in 2007, consolidated debt limits for federal, state and local governments have not been set by any president, which has worsened the debt management crisis. .
The Executive Director of the African Network for Environment and Economic Justice (ANEEJ), David Ugolor, speaking at the conference, also expressed concern over the country’s failure to account for the $3.5 billion Special Drawing Rights (SDRs) allocated to the country by the International Monetary Fund (IMF) in 2021 in direct response to the economic crisis triggered by the Covid-19 pandemic.
Ugolo lamented that the use of SDRs has been shrouded in secrecy with no information in the public domain by the federal government and there is also no parliamentary coverage of the SDR issue in Nigeria.
To this end, he called on the National Assembly to hold a public hearing on the issue and invited the Minister of Finance, Budget and National Planning and the Governor of the Central Bank to explain the use of the 3 .4 billion SDR allocated by the IMF since August 23, 2021. inactive at the CBN, as well as to explain the use of the $3.4 billion Covid-19 facility granted by the IMF, which has been fully used .
Ugolor underscored the need for a pan-African approach to the contribution, allocation and management of SDRs that takes into account the ability to deliver a greater public good to Africans.
Also speaking, Country Representative of Policy House International, Taiwo Akerele pointed out that Nigeria’s borrowing appetite is one of the main reasons the country is in debt crisis.
It was agreed that instead of encouraging new borrowing, Nigeria should leverage its rich resources through improved debt collection management that eliminates illicit financial flows, profit shifting, evasion and tax evasion, rampant looting with impunity and unnecessary tax exemptions.
He also lamented that the current Debt Service Strategy 2020-2023 is not inclusive as it does not reflect modern reality and lacks a broader approach that is inclusive of citizens and CSOs, just like most databases. underlying the strategy, such as real GDP, oil production volume and continued reliance on the debt-to-GDP ratio no longer hold.
Akerele said there was a need to immediately review Nigeria’s debt strategy and policies to make them inclusive with the involvement of civil society in loan contracting and monitoring processes.
A statement released at the conference, however, called for the need to keep questioning the international financial system as multilateral financial institutions have been established and run in a way that stifles growth and development in the south, including Nigeria.