Presidential candidate of the Peoples Democratic Party (PDP), Alhaji Atiku Abubakar has expressed worries over the slipping trend in the Nigerian economy.
He lamented the rising profile of the nation’s debt which he said is slipping from medium to high risk of distress.
Atiku said this on Friday while responding to a statement credited to Nigeria’s finance minister, Hajia Zainab Ahmed that the nation’s debt servicing exceeds revenue.
He said Thursday’s revelation by Nigeria’s Finance Minister that the cost of servicing Nigeria’s debt has surpassed the Federal Government’s retained revenue by N310 billion in the first quarter of the year is very worrisome.
“First, this action must be in breach of all known reasonable debt-sustainability thresholds. Second, it puts a big question mark on the capacity of the government to manage its rising debt profile without endangering macroeconomic stability. Indeed, I am concerned that this action is already exposing Nigeria to financial stability issues as we slip from a medium risk of debt distress to a high risk of debt distress.
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“I had on several occasions warned that not only is the fiscal cost of government’s indiscriminate borrowing so enormous but has even greater opportunity costs as we sacrifice investments in critical areas, including education, health, and other basic services. This is certainly detrimental to Nigeria’s long-term growth.
“I urge the government to as a matter of urgency take immediate steps to slow down the rate of debt accumulation by promoting more Public Private Partnerships in critical infrastructure funding and identifying more innovative funding options.
“Review the current utilization of all borrowed funds and ensure that they are deployed more judiciously. Specifically, the government must ensure that all borrowed funds are for priority infrastructure projects that would generate income, boost output, and put the economy on the path of sustainable growth.
“Review the country’s debt strategy by focusing on concessional and semi-concessional sources with lower interest rates and relatively long-term maturity. The government must reduce the issuance of short-dated debt instruments”.
Atiku also charged the Federal Government to take steps to improve its spending efficiency and drastically cut unnecessary and wasteful expenditures.
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