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01.07.2021 news Nigeria’s Debt Burden the Focus at Launch of Marcel Mbamalu’s ‘Prime Business’

Published 1st Jul, 2021

By FIJ

Economists and communication experts have asked the Nigerian government to expend borrowed funds on capital projects rather than servicing recurrent expenditure.

The charge was given at a panel discussion on the theme ‘Debt Burden and Quest for Economic Recovery’, during the launch of online business newspaper, Prime Business, an independent publication by multimedia company Newstide Publications Limited.

Development economist, data scientist, project finance expert and keynote speaker at the event, Dr. Bongo Adi, observed that “90% of our revenue is used in debt servicing”.

Stating that past borrowing by government hasn’t served Nigeria well, Adi said it is important for Nigeria to recover its economy.

“If you look at average growth between 2015 and now, it is below 2%, so it is very important that the economy is recovered,” he said.

According to Adi, even though debt is increasingly becoming important in today’s world, the validity of using debts to recover the economy? is still a question begging for answer.

Adi noted that from the point of the borrower, there is nothing wrong with debt, since it is a tool for leverage. However, from the standpoint of the borrower, “Yes, debt may be cheap, but the cost of borrowing is high. So in the end, debt may actually not be cheap.”

Also speaking, renowned career diplomat, Ambassador Ejeviome Otobo, said that “any country that begins to borrow to pay its recurrent expenditure is in deep trouble”.

“It is bad enough that the country is borrowing so much, but it is even worse that we are using it to pay for recurrent expenditure,” Otobo lamented.

Dr. Marcel Mbamalu, Publisher/Editor-in-Chief of Prime Business, said with the increasing debt profile, Nigeria is on a sloppy slide.

“Much as the government is trying to play smart with its unwholly borrowing habit, it is disheartening that the Nigerian people would be made to pay for the indiscretions in years to come,” Mbamalu said.

Admitting that the media had an integral part to play, Dr. Mbamalu said it is not enough that they report government’s borrowing but fail to report the use to which the borrowed funds are put.

He charged media practitioners to hold government accountable by monitoring how those borrowed funds were expended and then report to the people.

“The media is not doing enough in probing and playing the watchdog role. There are ample cases of media gagging and state-sanctioned bullying of the press, coupled with the lack of transparency in the loan deals with China, he said.

“The media can do better by keeping the issues fresh and constantly asking questions of leaders who go aborrowing. It is not enough to report on the new debts; questions should be asked to what legacy projects have come out from debts incurred years ago and for which deductions are being made at source, as well as what the opportunity costs there are. That is surely a first step to keeping the conversation on debts afresh.”

Published 1st Jul, 2021

By FIJ

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