By Favour Nnabugwu
An insurance expert has condemned the repayment of Nigeria’s external debt, saying the money used for the repayment should have been used to improve Nigeria’s infrastructure.

Chief Justin Olabode Emmanuel, Chairman of Sterling Assurance Company in an interview with Vanguard during the company’s 12th Annual General Meeting in Lagos recently said that Nigeria should rather had used its debt repayment money to improve the country’s infrastructure than rushing to repay its debt.

Emmanuel argued that though no country could survive without loan yet no nation has been in such a hurry like Nigeria to repay its loan.

According to him, “There is no nation that pays its debt; we could have used what spent in paying our debt on improving the country’s infrastructure which would in turn rob off on our economy to further develop it.”

Emmanuel, an outstanding Chartered Accountant of note and successful businessman chairing the board of over 20 companies in the country including Sterling Assurance said, “The way forward is to find ways of improving the country’s infrastructure. Nigeria has the resources; they can do it if they reduce the cost of governance”.

Amplifying the Chief Olabode Emmanuel’s view point, Co-ordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala in her sumbission warned the country against excessive borrowing, added that Nigeria would have to watch her domestic borrowing.

Okonjo-Iweala analysed the country’s debt thus, “We have about N5.2 trillion in domestic debts and about $5.3 billion in external debts. Bringing total debt figures to $39.7 billion which is about 20 per cent of Gross Domestic Product, GDP”

Okonjo-Iweala, however, lamented that of the 20 per cent of GDP debt stock, 17.5 per cent of it is domestic debt

She said, “Nigeria has to reduce borrowing but cannot stop borrowing immediately because it will be a shock to the system. The government has said it will put the trend on a down ward part on domestic debts because whether government likes it or not it is bound to respect the terms of the bonds it is holding and other financial commitments.”

Okonjo-Iweala noted that the total debt figure as a percentage of GDP was not worrisome but that the debt/GDP ratio could become of concern if it hits the 60 per cent threshold, in line with international norm.

She said the external debt was “extremely low” and all concessionary but that the domestic debts mainly in Federal Government Bonds and Treasury Bills would be brought down through a systematic approach.

Dr Abraham Nwankwo, the Director-General of Debt Management Office, DMO said that 85 per cent of Nigeria’s external debts were concessionary with repayment period spanning decades, adding that the concessionary nature of the debts allowed government to repay without straining itself.

He said that the loans were taken for long-term projects such as roads, railways, bridges, stadia and other public facilities that had long gestation periods.

Nwankwo said the repayments were long-term to match the revenue generated from the investments.