Aidoghie Paulinus, Abuja
The Federal Government has flayed comments by former vice president, Atiku Abubakar, on Nigeria’s debt profile describing him as a scaremonger who based his submissions on false premises.
Minister of Information and Culture0, Lai Mohammed, in a statement yesterday said Abubakar’s statement on the debt profile issued on Tuesday was based on apocalyptic scenarios.
“Contrary to the statement credited to Alhaji 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 per cent 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,” he said.
Abubakar had said the huge amount spent by the nation servicing debts in the country when matched with the revenue accruing to the country, was an indication that the country is facing serious financial crisis.
The presidential candidate of the Peoples Democratic Party (PDP) in the 2019 election voiced out serious concerns that if revenues did not increase quickly, the country could become insolvent and creditors may foreclose on Nigeria as has happened in Sri Lanka and the Maldives.
Mohammed, however, said said while the Federal Government welcomed constructive criticism, it 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,’’ Mohammed said.
Giving details about the nation’s debt profile, Mohammed said Nigeria’s debt to revenue ratio of 99 per cent in the first quarter of 2020 quoted by Vice President Abubakar was 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,’’ Mohammed added.
The minister said the debt service provisions in the annual budgets include principal repayments, interest payments and all other applicable charges, adding ‘’ 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 needed to go up, the minister said the Federal Government had introduced several measures to shore up revenues, listing some of the measures as the passage and implementation of the Finance Act, 2019, on-going reforms in the oil and gas sector, tax administration and collections, as well as the Strategic Revenue Growth Initiatives.
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, issue of creditors foreclosing on Nigeria, as strangely predicted by the former Vice President, does not arise.
‘’One of the reasons why 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 six per cent,” he said.