Olawale Ajimotokan in Abuja
Former Vice President, Alhaji Atiku Abubakar, has come under criticism from the federal government for portraying an apocalyptic scenario about the country’s debt profile.
In a statement issued yesterday, the Minister of Information and Culture, Alhaji Lai Mohammed, likened Atiku’s prophetic submission to one anchored on a false premise.
Mohammed said although the federal government is open to constructive criticism, such must be based on verifiable facts rather than conjectures and innuendos.
‘’There is no doubt that former Vice President Atiku Abubakar loves our country and wishes it well, otherwise he would not have sustained his serial quest for the country’s highest position. One can only hope that his resort to the use of such words as ‘precipice’, ‘foreclosure’ and ‘economic ruin’ does not reflect anything but best wishes for the country at this time,” Mohammed said.
The minister punched hole in the figure of Nigeria’s debt to revenue ratio of 99 per cent in the first quarter of 2020 quoted by Atiku, saying it was not in the Medium-Term Expenditure Framework and Fiscal Strategy Paper, where the former vice-president claimed he got it from.
He said: ‘’We are also not able to ascertain the source of the first quarter figures of N943.12 billion for debt servicing and N950.56 billion for retained revenue, which he also quoted.”
According to the minister, the debt service provisions in the annual budgets included principal repayments, interest payments and all other applicable charges.
‘’Therefore, the statement that debt servicing does not equate to debt repayment is not only wrong, but ill-informed,” he added.
In response to the assertion by Atiku asking for revenue to be scaled up, Mohammed noted that the federal government has introduced several measures to boost revenue drive.
He listed some of the measures to include the passage and implementation of the Finance Act 2019, various on-going reforms in the oil and gas sector, tax administration and collections, as well as the strategic revenue growth initiatives.
In addition, Mohammed also waved off the possibility of foreclosure on Nigeria by creditors as predicted by Atiku. He said such scenario is unlikely as the country’s debt service is expressly provided in the annual budgets and the debt service payments are made as and when due.
He said contrary to Atiku’s allusion that Nigeria has experienced alarming and unprecedented increase in the ratios of debt to GDP and debt service to revenue, the country’s ratio of debt to GDP is one of the lowest in the world at 19 per cent as at December 31, 2019.
The minister added that the government is taking steps to increase revenue so as to bring down the ratio of debt service to revenue.
‘’One of the reasons why debt service to revenue is high is because revenue generation in Nigeria has been low with over-dependence on the oil sector. This is corroborated by the fact that the ratio of Nigeria’s tax revenue to GDP is one of the lowest in the world at about 6 per cent,” the minister said.
He noted that unlike what was obtained in the past, “when the country borrowed to service the crass indulgence of a few fat cats,” the loans being obtained by the current administration are being primarily used to finance infrastructural projects, which include roads, railways, bridges and power, while the loans are long-term in nurture, which would benefit present and future generations.
‘’We have said that in the face of massive infrastructural decay, no responsible government will sit by and do nothing. This administration’s borrowing, therefore, is aimed mostly at revamping our infrastructure. The loans for the education sector will contribute to the development of our human capital while the loans for the agriculture sector will help the move to diversify the economy,” Mohammed stated.