Chuks Okocha in Abuja
Former Vice President Alhaji Atiku Abubakar has warned that Nigeria’s increasing debt profile, which stood at 99 percent of the nation’s revenue profile in the first quarter of 2020, would drive the country towards economic precipices.
A statement, which was personally signed by Abubakar, called on the federal government to take immediate steps to reduce its expenditure, especially those on wasteful projects such as the maintenance of the Presidential Air Fleet, unnecessary renovations of public buildings, the maintenance of limousine fleet for top government officials, overseas medical travels and the ₦4.6 billion Presidential Villa maintenance budget etc.
The former vice president said: “Nothing has shocked me in my entire life in public service as the revelation from Nigeria’s First Quarter 2020 financial reports in the Medium Term Expenditure Framework and Fiscal Strategy from the Federal Ministry of Finance, Budget, and National Planning, which shows, alarmingly, that whereas Nigeria spent a total sum of ₦943.12 billion in debt servicing, the federal government’s retained revenue for the same period were only ₦950.56 billion.
“This means that Nigeria’s debt to revenue ratio is now 99 per cent. This is a crisis! Debt servicing does not equate to debt repayment. The reality is that Nigeria is paying only the minimum payment to cover our interest charges. The principal remains untouched and is possibly growing.”
Abubakar, who was also the Peoples Democratic Party (PDP) presidential candidate in 2019 elections, said that Nigeria might become insolvent and suffer foreclosure from its creditors like occurred Sri Lanka and the Maldives if the country’s revenue did not rise quickly.
He said that his editorial opinion on December 17, 2019, titled ‘Endless Borrowing Will Lead Nigeria to Endless Sorrowing,’ which counseled the federal government to desist from indiscriminate borrowing and suggested ways to increase revenue and reduce expenditure
He said: “Again, on May 15, 2020, I counseled that the federal government ought to reduce Nigeria’s budget by at least 25 per cent to reflect the economic realities of the times that we live in. Again, my entreaties were brushed aside.”
He said that he is concerned by the alarming and avoidable unprecedented increase in the debt to GDP ratio and debt to revenue ratio as a member of an administration that paid off Nigeria’s entire foreign debt.
The former vice president said that it is ironical that Nigeria could maintain a Presidential Air Fleet that has more planes than the presidential fleets of those countries that it borrowed from.
“Nigeria must sell those planes and channel the revenue to other vital areas of need, while taking additional steps to reduce the cost of running our government,” Abubakar said.