NAN: Some financial experts have expressed divergent views on the Federal Government’s stance that the country was still solvent enough to take more loans to develop the economy. Nigeria’s total debt stock now stands at N8.7 trillion out of which N6.85 trillion is the domestic debt stock.

The total debt stock represented 21.5 per cent of the Gross Domestic Product (GDP) Dr Yerima Ngama, the Minister of State for Finance,  told newsmen on Wednesday after the Federal Executive Council (FEC) meeting in Abuja that the nation was under-borrowing.

Also, Dr Abraham Nwankwo, Director- General of the Debt Management Office (DMO), said that the country was still solvent enough to borrow up to 40 per cent of its GDP. Mr Eddie Osarenkhoe,  a former President, Finance Houses Association of Nigeria (FHAN), said that the Federal Government was right, adding that the nation had huge infrastructure deficit. Osarenkhoe agreed that government should borrow more to execute projects that could impact on the economy.

“The country cannot continue to keep money in the external reserves, while we have numerous capital projects to be developed, “ he said. Osarenkhoe advised that government should borrow to carry out projects that would repay the loans over time.

He said that the annual budgets were not sufficient enough to provide all the needed infrastructure. He said that many developed nations did not use their own resources to develop the infrastructure, but borrowed from outside.

Mr Wole Olowu, the General Manager, True Bond Microfinance Bank Ltd.,also  said that there was nothing wrong in borrowing if the government intended to use the fund to improve people’s standard of living. Olowu said that the advanced countries also borrowed to finance various projects in their countries. “The nation can achieve good development with borrowing if only the government can apply financial discipline in using the money for,” he said.

He said that there was nothing bad in borrowing if the money would be effectively utilised, but that it could be a problem if the funds were mismanaged. Dr  Oluyombo Onafowokan, a Senior Lecturer in the Department of Financial Studies, Redeemers University, however, disagreed with the stance of the Federal Government.

Onafowokan said that borrowing was not good for a nation that depended largely on consumption of imported goods. He said that borrowing did not portray economic sense and was counter-productive to economic growth. “Has the funds generated internally been judiciously used?

“ Onafowokan advised government to depend on internally-generated revenues to build infrastructure in the country. The nation does not need to borrow to survive.”If the Late Obafemi Awolowo could run the economy during the civil war without borrowing, there is no need for government to borrow now, “ he said.

Dr Deji Thomas, a Senior Lecturer in the Department of Economics, University of Lagos, said that the further borrowing could bring the nation back to the debt trap of the 80s. Thomas said that such funds that would be borrowed might end up in individual pockets, adding that there was no proper accountability in the country. “How did the government spend revenues generated in 2012? “ Thomas expressed regret that the nation could not account for how the 2012 budget was spent.