Officials at the African Conference on Debt and Development (AFCODD) have expressed concerns about Nigeria’s increasing debt profile as the country’s debt stock stood at $100billion as of March 2022.
An estimate by the Debt Management Office (DMO) disclosed that as at 31 March 2022, external debt stood at $39billion while domestic debts stood at $60billion.
Of concern to them is that despite the Section 42(1) of the Fiscal Responsibility Act, 2007 that says “The President shall, within 90 days from the commencement of the Act and with advice from the Minister of Finance, subject to approval of National Assembly, set overall limits for the amounts of consolidated debt of the three tiers of government”, the debt limit has not been set.
They portrayed it as unfortunate that since the approval of the FRA in 2007, the consolidated debt limits of the federal, states and local governments have not signed by any President and this has worsened the debt management crisis.
The Executive Director of the African Network for Environment and Economic Justice (ANEEJ), David Ugolor, while speaking at the conference, also expressed concerns over the inability of the nation to account for the $3.5billion Special Drawing Right (SDR) assigned to the country by the International Monetary Fund (IMF) in 2021 as a swift response to the economic crisis unleashed by the Covid-19 pandemic.
Ugolo bewailed that the utilization of the SDRs has been concealed in secrecy with no information in public domain by the Federal Government neither is there parliamentary coverage of the SDRs issue in Nigeria.
To this end, he implored the National Assembly to call for a public hearing on the issue and invite the Minister of Finance, Budget and National Planning and the Governor of Central Bank to account for the use of $3.4bn SDR granted by IMF since 23 August 2021 sitting idle in the CBN, as well as to account the use of the $3.4bn Covid-19 facility allocated by the IMF which has been completely drawn down.
Ugolor emphasized on the need for a pan-African approach to the SDRs contribution, allocation and management that takes into recognition the ability to deliver greater public good to Africans.
Also speaking, the Country Representative of Policy House International, Taiwo Akerele, noted that Nigeria’s borrowing appetite is one of the main reasons why the country is in debt crisis.
It was agreed that instead of encouraging further borrowings, Nigeria should limit its rich resources through an enhanced Debt Recovery Management that kicks out illicit financial flows, profit shifting, tax evasion and avoidance, unbridled looting with impunity and unnecessary tax holidays.
He also bewailed that the present Debt Servicing scheme 2020-2023 is not inclusive as it does not portray modern day reality and lacks a broader citizen and CSO inclusive approach just as most of the baseline underpinning the strategy such as real GDP, oil production volume and continued reliance on Debt/GDP ratio no longer stands.
Akerele stated that there is the need for immediate review of Nigeria’s debt strategy and policies to make them inclusive with civil societies’ involvement in loan contraction and monitoring processes.
A press release issued at conference, however, requested for the need to sustain interrogation of the international financial system as the multilateral financial institutions were created and managed in ways and manners that stifle the growth and development of the south, including Nigeria.