Atiku Abubakar, former vice-president, has again tackled the federal government on Nigeria’s rising debt profile, accusing it of “squandering the opportunities of future generations”.
In an article on Tuesday, the former presidential candidate said the federal government should “drastically” reduce its expenditure to cushion the effect of the country’s high debt.
Atiku quoted figures from the medium term expenditure framework and fiscal strategy from the federal ministry of finance, budget, and national planning, which shows that Nigeria’s debt to revenue ratio was 99% in the first quarter of 2020.
The report, he said, noted that while the federal government spent ₦943.12 billion in debt servicing in the first quarter, it retained revenue of only ₦950.56 billion during that period.
“No one should be deceived. 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,” Atiku wrote.
“We are at a precipice. If our revenue figures do not go up, and go up quickly, Nigeria risks a situation where our revenue cannot even sustain our debt servicing obligations. Meaning that we may become insolvent, and our creditors may foreclose on us, as has occurred in Sri Lanka and the Maldives.”
Atiku, who has repeatedly criticised the federal government over frequent borrowings, said as part of an administration “that paid off Nigeria’s entire foreign debt,” he is concerned by the “alarming and avoidable unprecedented increase in our debt to GDP ratio and debt to revenue ratio”.
“Not only have we squandered our opportunities, we have also squandered the opportunities of our future generations by bequeathing them a debt that they neither incurred nor enjoyed,” he said.
“As a matter of utmost urgency and importance, I call on the Federal Government to take immediate steps to drastically reduce its expenditure, especially on wasteful projects, such as maintenance of the Presidential Air Fleet, and unnecessary renovations of buildings that could serve as is, limousine fleet for top government officials, overseas travels and treatments, and the ₦4.6billion Presidential villa maintenance budget, etc.
“We cannot be on the verge of economic ruin, while still maintaining a Presidential Air Fleet that has more planes than the Presidential fleets of those from whom we take these loans. 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.”
He said federal government cannot justify the debt profile by pointing at Nigeria’s debt to GDP ratio as that is “only half the picture”.
“Our debt to revenue ratio paints a much more realistic portrait of our financial situation, especially as our revenues are majorly tied to a mono-product, oil and gas, which are very vulnerable to global shocks,” he said.
“Again, I warn that Nigeria is facing a crisis, and we cannot continue to keep up appearances by taking out more loans to prop up our economy. That will amount not just to robbing Peter to pay Paul, but to robbing our children to pay for our greed!”