Ndubuisi Orji, Abuja
Former vice president, Atiku Abubakar, has said the staggering sum spent servicing debts in the country when matched with the revenue is an indication that the country is facing serious financial crisis.
Atiku, in a statement, yesterday, expressed concerns that if revenues did not increase quickly, the country could become insolvent and creditors may “foreclose on us” as has happened in Sri Lanka and the Maldives.
He said the country is facing a crisis and cannot continue to keep up appearances by taking out more loans to prop up our economy, adding that that will amount not just robbing Peter to pay Paul but robbing our children to pay for our own greed.
He claimed that nothing has shocked him in his entire life in public service as the revelation from Nigeria’s first Quarter 2020 financial reports in the Medium Term Expenditure Framework and Fiscal Strategy from the Federal Ministry of Finance, Budget, and National Planning, which showed “alarmingly, that whereas Nigeria spent a total sum of 943.12 billion in debt servicing, the Federal Government’s retained revenue for the same period were only 950.56 billion. This means that Nigeria’s debt to revenue ratio is now 99 per cent.
“No one should be deceived. This is a crisis! Debt servicing does not equate to debt repayment. The reality is that Nigeria is paying only the minimum payment to cover our interest charges. The principal remains untouched and is possibly growing.
“We are at a precipice. If our revenue figures do not go up, and go up quickly, Nigeria risks a situation where our revenue cannot even sustain our debt servicing obligations. Meaning that we may become insolvent, and our creditors may foreclose on us, as has occurred in Sri Lanka and the Maldives.
He called on the Federal Government “to take immediate steps to drastically reduce its expenditure, especially on wasteful projects, such as maintenance of the Presidential Air Fleet, and unnecessary renovations of buildings that could serve as is, limousine fleet for top government officials, overseas travels and treatments, and the 4.6 billion Presidential Villa maintenance budget.
“We cannot be on the verge of economic ruin, while still maintaining a Presidential Air Fleet that has more planes than the Presidential fleets of those from whom we take these loans. In fact, Nigeria must sell those planes and channel the revenue to other vital areas of need, while taking additional steps to reduce the cost of running our government.
“As part of an administration that paid off Nigeria’s entire foreign debt, I am concerned by the alarming and avoidable unprecedented increase in our debt to GDP ratio and debt to revenue ratio. The alarm I sounded last year is now sounding louder.
“Not only have we squandered our opportunities, we have also squandered the opportunities of our future generations by bequeathing them debt that they neither incurred or enjoyed.
“The Federal Government cannot continue to justify these unsustainable numbers by pointing at Nigeria’s debt to GDP ratio. That is only half the picture. Our debt to revenue ratio paints a much more realistic portrait of our financial situation, especially as our revenues are majorly tied to a mono product, oil and gas, which are very vulnerable to global shocks.”