A former presidential candidate and former Deputy Governor of the Central Bank of Nigeria (CBN), Professor Kingsley Moghalu has lamented that the Nigerian government led by President Muhammadu Buhari has “fallen off the debt cliff”.
Professor Moghalu made the remarks in a series of tweets on his Twitter handle on Monday, following the news that Nigeria borrowed over N300 billion to service her debts.
News Band had, on July 21, reported that Nigeria’s debt servicing has surpassed its revenue when the Federal Government released the data contained in the 2022 fiscal performance between January and April released by the Minister of Finance, Budget and National Planning.
According to the report, the cost of servicing debt surpassed the government’s retained revenue by N310 billion in the first four months of this year.
The document showed that total revenue for the period was N1.63 trillion, while debt service gulped N1.94 trillion.
Reacting to the report, a despondent Moghalu wrote:
“When some of us were warning that we’re heading into a debt crisis, some official jokers in high places in this country told us “No: our debt to GDP ratio is still manageable”
“Now that we have earned N1.6 trillion in Q1 of 2022 and spent N1.9 trillion to service debt, effectively borrowing over N300 billion to pay our debt, the jury is in.
“We have fallen off the debt cliff. The next government in Nigeria, whoever leads it, will have to pull a rabbit out a hat to keep our fiscal boat afloat.
“Asset sales and debt restructuring will likely be inevitable.
“Unlike in the Obasanjo era, no one will give us debt relief. Our case is weak because we have been irresponsible. Simple.
“The issue for us as a developing country was always the ratio of debt to our revenues. Now it’s at 120% .
“Welcome to Nigeria. Anyone quoting the debt figures of the US and Japan – seriously productive economies – in relation to Nigeria’s debt crisis deserves to be flogged in the public square.
Replying to Kingsley Moghalu, a concerned Nigerian offered four solutions to the government as a way out of the quagmire:
- Devolve power and responsibility to the federating units
- Reduce Ministries, Departments and Parastatals (MDAs) by seventy per cent through merger or scraping
- Commercialise all government owned enterprise to run like a ltd without recourse to government fund, and,
- build our economy around energy and agriculture production value chain.