By Emman Ovuakporie
ABUJA—BARELY 24hours after President Muhammadu Buhari directed that the local debts incurred by the Federal Government should be serviced, House of Representatives members, yesterday, moved that local debts put at about N3.48 trillion should be probed.
Recall that while laying the budget on Wednesday, the president announced that at least 80percent of N2.14 trillion earmarked for debt servicing in the 2019 budget should be used for local debts.
To this end, the House mandated the committees on Aids and loans, Debt Management, Capital Market and Institutions and the Committee on Banking and Currency to carry out an in-depth investigation on the debts. This was sequel to a motion promoted by Tajudeen Yusuf (PDP, Kogi) on the need to Investigate Nigeria’s alarming debt.
Yusuf expressed concern over the alarming rise of Nigeria’s debt profile which has led to growing economic instability, stifled growth and stunted development, as and had impacted negatively on various sectors of the economy.
He said that there had been continued controversy about the true state of the nation’s debt profile such that there was glaring disparity in the figures given by the Federal Government and some Fiscal Policy Monitoring Organisations.
Yusuff further gave the analysis of Nigeria’s external and domestic debt which reveals that the external debt grew to $17.83 billion in June 2018 from $10.49 bi11ion in 2015, while domestic debt which was N8.39 trillion in June 2015 had risen to N12.15 trillion as of June 2018; (representing an increase of N7.6 trillion in three years.
He said despite the rising national debt profile, there was a sharp increase in sub-national borrowing in the last three years, such that the domestic debts of state governments rose from N1.69 trillion in June 2015 to N3.4trillion in June 2018.”
He expressed worry that “Though borrowing (external and/or domestic) is an important and necessary strategy to reflate the economy and stimulate national growth and development, the positive impact of Nigeria’s borrowings since June 2015 is yet to be seen.”