Stakeholders at the recently finished national conference on debt and development emphasised the need of bringing debt to a sustainable level in order to achieve relief amidst the mounting weight of debt.
They maintained that as debt continues to be a tool used by wealthy, developed nations to subjugate developing nations, Nigeria and other African nations must have their debts cancelled.
The conference’s organiser, David Ugolor, the Executive Director of the African Network for Economic and Environment Justice (ANEEJ), expressed concern about the country’s current debt, which is estimated to be worth N87.38 trillion as of March 2023, and the way that Nigeria’s revenue is currently being diverted from basic social services to debt servicing obligations.
The current debt load, he warned, would push more Nigerians into extreme and multifaceted poverty and have a major negative impact on the country’s ability to manage its finances if swift and decisive action is not taken by both the international community and the Nigerian government.
He stated that failure to meet the Sustainable Development Goals and the climate efforts at the Paris Agreement are among the other unfavourable outcomes.
Ugolor recalled that African leaders had demanded debt relief across the continent during the Africa Climate Summit in Nairobi, Kenya, in order to enable their nations to fulfill their climate change-related duties.
He stated that “The asymmetries between north and south and between creditors and debtors occur within the framework of a financial architecture that favours the most developed countries and the groups that concentrate the greatest capital power in the world. The costs of the crisis are unevenly distributed.”
However, Eze Onyekpere, the lead Director of the Center for Social Justice (CSJ), argued that although the Fiscal Responsibility Act (FRA) makes it explicit that debt should only be taken on for capital projects and human development initiatives, the government regrettably borrows money to cover employee salaries.
He continued by saying that borrowing must always be done in a transparent manner in accordance with section 48 of the FRA.
“Unfortunately, several borrowings in Nigeria were done by the President, Minister of Finance and the National Assembly as there was never public consultation or cost benefit analysis,” he stated.
Saying that “our leaders have been going on a borrowing spree and several reports by CSOs to caution them ignored,” he bemoaned the fact that “our leaders have been going on a borrowing spree” and that “the argument that Nigeria’s debt is still sustainable is false.”
He said: “I will not be part of those campaigning for debt relief because we have been talking and they are not listening. Now, they want us to be asking for debt relief. We are stealing from our revenue and still stealing from money borrowed; if we keep stealing from the treasury, we won’t make progress.”
Nigeria’s national debt is still manageable, according to Sani Abubakar, Head of Policy Strategy and Risk Management Department, Debt Management Office. He stated that the country’s inability to stop borrowing given its existing circumstances makes it imperative to strengthen its revenue-generating capacity.