Nigeria's business owners are worried over the country's mounting debt and huge debt to revenue service, noting that this forbode negative implications for the economy.
The Nigeria Employers’ Consultative Association (NECA) at a forum on Tuesday says Nigeria’s increasing debt burden posed danger to the developmental capacity of the economy.
Timothy Olawale, NECA Director General said the debt burden was worrisome because about 25 per cent of the 2019 budget size of 8.8 trillion naira amounting to 2.140 trillion naira was going into servicing of debts.
He lamented the crowding out of the private sector on the domestic market by the government local borrowing.
Timothy Olawale, NECA Director General said the debt burden was worrisome because about 25 per cent of the 2019 budget size of 8.8 trillion naira amounting to 2.140 trillion naira was going into servicing of debts.
He lamented the crowding out of the private sector on the domestic market by the government local borrowing.
“’The real sector should be able to access funds which should ultimately lead to increased employment opportunities within the economy.
“’Latest figures released by the Debt Management Office (DMO), showed that government’s domestic debt profile rose to 15.814 trillion naira in September 2018 from 15.629 trillion naira in June, 2018 (1.19 percent increase),” Olawale said.
He said that the amount proposed for debt serving in the 2019 budget could have a negative effect on the developmental capacity in spite of government’s financial managers’ argument that the rate of increase was within a manageable limit.
Olawale cautioned that while the effect of the increasing debt might not be immediate in totality, it could be catastrophic in the long term with a chunk of revenue consumed by debt servicing to the detriment of infrastructure development.
He urged the federal and state governments to take steps aimed at cutting the cost of governance and recurrent expenditure.
“’Latest figures released by the Debt Management Office (DMO), showed that government’s domestic debt profile rose to 15.814 trillion naira in September 2018 from 15.629 trillion naira in June, 2018 (1.19 percent increase),” Olawale said.
He said that the amount proposed for debt serving in the 2019 budget could have a negative effect on the developmental capacity in spite of government’s financial managers’ argument that the rate of increase was within a manageable limit.
Olawale cautioned that while the effect of the increasing debt might not be immediate in totality, it could be catastrophic in the long term with a chunk of revenue consumed by debt servicing to the detriment of infrastructure development.
He urged the federal and state governments to take steps aimed at cutting the cost of governance and recurrent expenditure.
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