Forty-two civil society organisations on Thursday raised concerns over Nigeria’s increasing debt profile, asking that efforts be made to stop the trend.
They expressed worry that President Muhammadu Buhari again submitted to the National Assembly request for the approval of $29.96bn loan under the 2016-2018 External Borrowing Plan at a time the Debt Management Office reported Nigeria’s indebtedness at June 30, 2019 in the sum of $83.8bn, being an increase of 31.35 per cent over the $63.8bn debt outstanding at June 30, 2015.
The organisations, in a statement, noted that while Nigeria deployed 54.3 per cent of its earned revenue to debt service in 2018, it deployed 54.2 per cent of all its earned revenue to debt service in the first half of 2019.
The organisations that signed the statement included the Centre for Social Justice, Civil Society Legislative Advocacy Centre, Centre for Democratic Research and Training, Civil Society Network Against Corruption, Human and Environmental Development, Centre for Democracy and Development, Partners for West Africa – Nigeria, Centre for Information Technology and Development, Socio-Economic Right and Accountability Project and the International Refugee Rights Initiative.
They argued that if at a debt level of $83.8bn, Nigeria was deploying over 54 per cent of its revenue to debt service, the country, after taking the new loan of $29.96bn, would need not less than 65 per cent of its revenue to service a new debt level of $113.7bn.
While taking note of efforts to increase government revenue through the Finance Bill pending in the National Assembly and the recently enacted amendment of the Deep Offshore and Inland Basins Production Sharing Contract Act, the organisations noted that the steps “are tepid and will not in any way dramatically improve government’s revenue.”
According to the organisations, the nation’s ratio of debt service to revenue is not sustainable and not in accordance with the obligation of the Federal Government under Section 41 (1) (b) of the Fiscal Responsibility Act to ensure that the level of public debt as a proportion of national income is held at a sustainable level.
They also claimed that there had been no transparency in the management of Nigeria’s debts as the actual and individual debt agreements, including the tenor, interest rates, terms of repayment and what happens in the event of default, among others are not in the public domain.
The group added that the Federal Government had failed to perform its obligations under Section 42 of the Fiscal Responsibility Act to set the limits on consolidated debts of the federal, state and local governments.
They therefore called on the National Assembly to conduct a public hearing on Buhari’s loan request to show that Nigerians could make input before a decision would be taken.
The statement read, “It must be noted that Nigerians are suffering the huge effect of the high level of borrowing which has necessitated government to churn out month after month of new multiple tax regimes through the banking institutions.
“We stress that there are various options apart from sovereign debt for the funding of capital and infrastructure projects, especially in the proper management and accountability of available resources from taxation and the oil and gas sector.
“In the circumstances, we demand the following from the Federal Government: as a preliminary measure before considering new loans, to set the limits of consolidated debts for the Federal, State and Local Governments in accordance with Section 42 (1) of the Fiscal Responsibility Act.
“The National Assembly should hold public hearings on the President’s loan request and to reflect the opinion of majority of Nigerians in the approval or disapproval process.”