Sovereign debt relief

•DMO urges immediate action

By Emma Ujah,Abuja Bureau Chief

The Federal Government, FG, has indicated that Nigeria’s debt sustainability has now come under serious threat following the recent rise in its revenue shortfalls. 

Making this disclosure yesterday at a workshop for members of the Senate Committee on Local and Foreign Debts and House Committee on Aids, Loans and Debt Management in Abuja, the Director-General of the Debt Management Office (DMO) Ms. Patience Oniha, further said that interest rates had sharply increased at both domestic and international capital markets, thereby making loans more expensive and debt service more burdensome.

She, therefore called for urgent actions to raise the nation’s revenue base.

Her words, “Debt has grown and we all know why.  Revenue base is low and we often don’t achieve annual revenue targets in the annual budgets.  Even if we achieve the revenue targets 100 percent, they are still too low for a country the size of Nigeria. 

“We have been dependent on borrowing as a country for a very long time.  We have been borrowing because the revenue base is low.  Because the revenue base is low, it is now threatening debt sustainability.

“We need urgent actions to moderate the level of new borrowing because debt service to revenue ratio would have been low if the revenue base had been very strong.

“There has been a lot of talk about raising revenue.  We now need urgent actions.  We need a stronger revenue base to ensure that our debt remains sustainable.”

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