Chairman of the Debt Management Roundtable (DMR), Taiwo Oyedele, has hinted that Nigeria’s unsustainable debt burden is fuelled by weak revenue generation.
Oyedele, who was a panellist during a session on ‘Sustainable Approaches to Public Debt Financing’ at the just-concluded Nigerian Economic Summit (NES 27), observed that Nigeria’s debt profile had reached unsustainable levels, and is characterised by low revenue, high spending or a combination of both factors.
He said: “The revenue of the government and the 36 states is not up to the budget of New York, which is a single state in the United States of America. As such, we have to harmonize multiplicity of taxes and collection agencies to ensure that revenue collection mechanisms are boosted.”
Reiterating his assertion, Director-General of the Debt Management Office (DMO), Ms Patience Oniha, said: “We can’t talk about debt alone; we must also talk about revenues.
When you borrow and invest these monies wisely, it will enhance growth and development. That is why we have issued promissory notes of over N1.5 trillion approved by the National Assembly.”
While admitting that Nigeria’s debt service to revenue is on the high side, she harped on the urgency of revenue diversification to hedge against the country’s growing debt burden.
At the session, where the DMR’s report on West Africa’s debt profile was launched, DMR Director of Research, Dr. Segun Omisakin, also attributed Nigeria’s growing debt burden to high overhead cost and over-reliance on oil and gas commodities.
He advised government to build a digital economy driven by innovation in key sectors of the economy such as telecommunications, transport and agriculture, adding that economic diversification and a refocus on the non-oil sector were the surest pathways to inclusive growth.