The precarious state of Nigeria’s (and indeed Africa’s) public debt have made many economic experts across the continent express their concerns.
They are making attempt to convince the policymakers in Abuja to take a different path in the management of the Nigerian economy.
The call was made at the African Development Bank Group 2021 Annual Meetings. The Director-General of the World Trade Organisation (WTO) and ex-Minister of Finance, Dr. Ngozi Okonjo-Iweala, the President of the African Development Bank (AfDB), Dr. Akinwunmi Adesina, and the Governor of the Central Bank of Egypt (CBE), Tarek Amer among other regional economic stakeholders, expressed concern about rising national debts in Africa.
They have therefore warned that most African countries face a high risk of falling into a debt trap. They noted that debt service has become a major burden on many African economies.
Data emanating from the National Bureau of Statistics (NBS), the Debt Management Office (DMO), and the International Monetary Fund (IMF) among others, show that total public debt in Nigeria grew from about N12.1trillion in May 2015, to N17.36 trillion in 2016, N21.72 trillion in 2017, N24.38 trillion in 2018, N27.4 trillion in 2019 and presently over N33 trillion in 2021.
The figures had skyrocketed to frightening levels in 2020 with the active connivance of the Ninth National Assembly under the Chairmanship of Senator Ahmad Lawan.
With the approval of fresh loans, the figure is still growing, President Muhammadu Buhari recently get the Senate’s approval of two fresh foreign loans of $1.5 billion and €995 million earlier in 2021 and in June 2021. The Red Chambers also approved another request from President Buhari for ongoing external loans to the tune of $8.325 billion and €490 million under the 2018-2020 External Borrowing (Rolling) Plan.
Speaking at the occasion, Okonjo-Iweala, who described the situation as worrisome asserted that with a higher debt carriage capacity comes a higher risk of distress and that ignoring debt sustainability would be a clear case of exposing the economies to systemic risks particularly when many of the African economies are on a downward economic path.
On his own part, Adesina, who noted that only one of 38 African countries is free from sustainability challenges, according to sustainability reports, called for full transparency on public debt issues, macroeconomic reforms convergence among African countries, fight against corruption, and deepening of domestic resource mobilization would need to be heeded in addressing the debt problem on the continent.