The Debt Management Office (DMO) has urged the Lagos Chamber of Commerce and Industry (LCCI) to support the Federal Government’s initiatives to grow its revenue and reduce debt.
Director-General of the DMO, Patience Oniha, who said this in a statement on Thursday in Abuja, was reacting to a report by LCCI condemning the Federal Government’s reliance on borrowings to fund budget deficits.
The chamber had said in its report that staying within the current Debt-to-Gross Domestic Product (GDP) threshold was an unreliable means of calibrating Nigeria’s current debt burden. According to the LCCI, government must review its borrowing parameters on the basis of the country’s Debt-to-Revenue ratio, which currently calls for concern.
Oniha said that the Federal Government was aware of the country’s relatively high Debt Service-to-Revenue ratio and had published the figures over the years.
She said that the country’s low revenue base and over-dependence on crude oil receipts were primarily responsible for the debt situation. “The primary reason for the high Debt Service-to-Revenue ratio is because Nigeria’s revenue base is low. “Furthermore, the government is largely dependent on the sale of crude oil as a major revenue source.