A financial analyst says Nigeria needs to keep borrowing to survive, despite the country’s worsening debt burden.
Zeal Akaraiwe was speaking on Morning Crossfire on Monday with Sheriff Quadry.
He said Nigeria’s past errors have forced the country to depend on borrowing. “We’ve put ourselves in a hole where we don’t have enough revenue to survive”
He criticized the country’s revenue generation and specifically questioned why Nigeria imports what it could produce locally.
He believes local production will save scarce foreign exchange.
Nigeria’s Debt Burden
Nigeria borrowed N6.64 tn ($16 bn) in 2021, according to the Debt Management Office (DMO). That
amounts to half of the N13.6 tn budget for the year.
The N6.64 tn borrowed in 2021 increased the total debt stock to N39.56 tn ($95 bn).
The debt burden is made worse by declining revenue, which makes it difficult for Nigeria to repay its loans without additional borrowings.
The country generated N5.51 tn generated in 2021, out of which more than 70 per cent was spent on debt servicing.
The International Monetary Fund (IMF) projects that figure to rise to 92 per cent in 2022.
Concerns Over Rising Debt
Not a few Nigerians are bothered by this.
On Sunday, the General Overseer of the five-million-member Redeemed Christian Church of God (RCCG) publicly expressed his worry.
“It’s in the news, undenied, that more than 90 per cent of our income … we are using it to pay the interest of the money we have already borrowed,” Pastor Enoch Adeboye told his congregation.
“We are borrowing more. Meaning what? According to a friend of mine, we are moving towards bankruptcy,” said the cleric.
The Federal Government has always defended its borrowings.
On Thursday, the Director-General of the DMO, Patience Oniha explained that loans were used to pull the economy out of recession in 2017 and 2021.
The government also argues that loans have been used in building infrastructure that would boost the economy.
