By Fola James
Top Industrialists and businessmen in Nigeria under the aegis of the Lagos Chamber of Commerce and Industry, LCCI are angry that the Buhari government has nothing tangible to show for the over N31 trillion debt owed foreign and local creditors.
The LCCI had in July expressed deep concern over plan by the federal government to borrow $2.5 billion from the World Bank.
The chamber said the fresh loan could push the nation’s debt stock to over N34 trillion by the end of the year, after records from Debt Management Office, DMO already indicated that the current public debt stood at N31 trillion at the end of June.
This is definitely not a cheery news for the LCCI, whose President Toki Mabogunje, said in Lagos, on Tuesday that the rising debt figure is giving many of her members sleepless nights, as the huge loans has not changed the lives of many Nigerians.
She said “LCCI is deeply concerned about the country’s rising debt portfolio without corresponding impact on output growth and economic development. According to official statistics from the Debt Management Office, public debt stock grew by eight percent to N31 trillion at the end of the second quarter, equivalent to 21 percent of GDP.
“At the peak of the pandemic in the second quarter, the Federal Government received financial support worth $3.4 billion and $288.5 million from the International Monetary Fund (IMF) and African Development Bank (AfDB) respectively, while negotiations are also on-going for a cumulative $1.8 billion credit support from the World Bank, African Development Bank (second tranche) and Islamic Development Bank.”
The situation is already bad enough, LCCI said warning that taking fresh loans “could possibly push the country’s public debt stock to around N34 trillion by year-end, equivalent to 23 percent of GDP. The growing level of the country’s debt is fast becoming unsustainable in the light of dwindling oil prices and production.”
It further stated that the debt burden has left the federal government with barely 30 per cent of its income to spend on critical infrastructure.
“Our position is reinforced by the uptrend in debt-service to revenue ratio from 60 percent by year-end 2019 to 72 percent as of May 2020. The high level of debt servicing continues to hinder robust investments in hard and soft infrastructures which are key to stimulating productivity and improving living standards.”
