{"id":80378,"date":"2023-01-17T15:26:02","date_gmt":"2023-01-17T14:26:02","guid":{"rendered":"https:\/\/www.africa-press.net\/nigeria\/uncategorized\/nigeria-cant-continue-in-path-of-rising-debts-experts-counter-tinubu"},"modified":"2023-01-17T17:02:48","modified_gmt":"2023-01-17T16:02:48","slug":"nigeria-cant-continue-in-path-of-rising-debts-experts-counter-tinubu","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/nigeria\/policy\/nigeria-cant-continue-in-path-of-rising-debts-experts-counter-tinubu","title":{"rendered":"Nigeria can\u2019t continue in path of rising debts \u2013 Experts counter Tinubu"},"content":{"rendered":"

Africa-Press – Nigeria. <\/strong><\/span>Economic experts have said Nigeria cannot continue on the path of indebtedness amid incompetence and inefficiency.<\/p>\n

The economic analysts were reacting to the All Progressives Party, APC, presidential candidate Bola Ahmed Tinubu\u2019s recent comment on Nigeria\u2019s 2023 appropriation bill.<\/p>\n

Recall that Tinubu remarked in his interaction with business stakeholders in Lagos that budget deficits are not necessarily bad.<\/p>\n

However, Nigeria\u2019s rising debt profile has been a source of apprehension for many economists and ordinary Nigerians.<\/p>\n

Indeed, for a country struggling on all fronts, an N77 trillion debt if the National Assembly approves President Muhammadu Buhari\u2019s 23.7 trillion Ways and Means advance, according to the Debt Management Office, DMO\u2019s recent statement, should raise dust.<\/p>\n

With the country\u2019s dwindling revenue portfolio and overbearing debt repayment burden, the fear continues to escalate.<\/p>\n

In perspective, a breakdown of this year\u2019s appropriation bill with N21.51 trillion expenditures and expected revenue of N9.73 trillion, shows that a whooping N6.31 trillion representing over 70 per cent of its aggregated revenue would be gulped by debt servicing and shooting up the country\u2019s budget deficit to N10.78 trillion.<\/p>\n

In plain economics, Nigeria\u2019s debt situation does not look good.<\/p>\n

A financial inclusion\/wealth management expert, Mr Idakolo Gbolade, said budget deficit financing could not translate to economic growth in Nigeria.<\/p>\n

He stated that the budget deficit is causing Nigeria to double-digit inflation and depreciation of the Naira.<\/p>\n

He added that historically, the budget deficit has not been productive because some of the projects financed by it are not economically viable. He cited Nigeria\u2019s railway, currently crippled by insecurity, as an example.<\/p>\n

\u201cBudget deficit financing cannot translate to economic growth in Nigeria because deficit financing has led to double-digit inflation with the country also battling chronic food inflation.<\/p>\n

\u201cThe deficit financing has consistently weakened the Naira and has led rating agencies to downgrade Nigeria\u2019s credit rating, thereby affecting the flow of investment opportunities and the ability of the private sector to source funding from foreign institutions.<\/p>\n

\u201cThe deficit spending by Nigeria cannot be said to be productive because some of the infrastructural projects financed by the government are not commercially viable projects that can repay the loans used to fund them.<\/p>\n

\u201cA significant example is the railways which have been rendered unproductive by insecurity that has affected their operations.<\/p>\n

\u201cContinuous deficit spending by the government would leave the government unable to undertake key social and infrastructural projects in the long run\u201d.<\/p>\n

Also, an Accounting and Financial Development don at Lead City University, Ibadan, Prof Godwin Oyedokun, said Nigeria is having budget deficits owing to inefficiency and incompetence.<\/p>\n

He said it was not good for a country to use a larger part of its income (revenue) on debt serving, as Nigeria did.<\/p>\n

Also, he disclosed that the country\u2019s budget deficit on recurrent expenditure would only plunge her unborn generation into a debt trap.<\/p>\n

He said the budget deficit becomes laudable if it is meant to finance capital expenditures.<\/p>\n

\u201cYes, the budget deficit is not bad at all. My stand has always remained that the country shouldn\u2019t use a larger part of its income to pay a debt; that is where the problem comes in. Another problem is how sincere are the government deficits in terms of budget. We have a deficit where recurrent expenditure is not lower than capital expenditures. It means we are going into debt to make a certain class of Nigerians wealthy. It won\u2019t be an issue if most people in the economy are productive. You pay a salary for a job for twenty people instead of two people.<\/p>\n

\u201cWe have deficits in inefficiency and incompetence. Such will not develop the economy. If the budget deficit is on capital expenditures, this will bring about future cash flow into the economy. If the Central Bank of Nigeria\u2019s 23 trillion ways and means is added, Nigeria\u2019s debt profile will hit N77 trillion. It means that generations yet unborn will be using their income to pay the debt of their fathers who decided not to take governance seriously,\u201d he lamented.<\/p>\n

For More News And Analysis About Nigeria<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Nigeria. Economic experts have said Nigeria cannot continue on the path of indebtedness amid incompetence and inefficiency. The economic analysts were reacting to the All Progressives Party, APC, presidential candidate Bola Ahmed Tinubu\u2019s recent comment on Nigeria\u2019s 2023 appropriation bill. Recall that Tinubu remarked in his interaction with business stakeholders in Lagos that […]<\/p>\n","protected":false},"author":84,"featured_media":80377,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,14],"tags":[1570,2140,254,945],"class_list":["post-80378","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-policy","tag-africa-press","tag-africa-press-nigeria-2","tag-nigeria","tag-tinubu"],"yoast_head":"\nNigeria can\u2019t continue in path of rising debts \u2013 Experts counter Tinubu - Nigeria<\/title>\n<meta name=\"description\" content=\"Economic experts have said Nigeria cannot continue on the path of indebtedness amid incompetence and inefficiency. 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