Former vice president Atiku Abubakar has decried the extent of borrowing by the federal government, saying Nigeria may become insolvent and its creditors may foreclose the country as occurred in Sri Lanka and the Maldives.
He also lamented that the huge borrowing has squandered opportunities of future generations, bequeathing them debt that they neither incurred nor enjoyed.
He asked the federal government to urgently take steps to drastically reduce its expenditure, especially on wasteful projects.
He recommended that costs should be cut on maintenance of the Presidential Air Fleet and unnecessary renovation of buildings that could serve as it is, limousine fleet for top government officials, overseas travels and treatments, and the 4.6 billion Presidential Villa maintenance budget.
The former vice president was reacting to Nigeria’s First Quarter 2020 financial report in the Medium Term Expenditure Framework and Fiscal Strategy from the Federal Ministry of Finance, Budget, and National Planning.
Atiku who described it as shocking said it was alarmingly that whereas Nigeria spent a total sum of 943.12 billion in debt servicing, the federal government’s retained revenue for the same period were only 950.56 billion.
He said “This means that Nigeria’s debt to revenue ratio is now 99%.
No one should be deceived. This is a crisis! Debt servicing does not equate to debt repayment. The reality is that Nigeria is paying only the minimum payment to cover our interest charges. The principal remains untouched and is possibly growing.
“We are at a precipice. If our revenue figures do not go up, and go up quickly, Nigeria risks a situation where our revenue cannot even sustain our debt servicing obligations. Meaning that we may become insolvent, and our creditors may foreclose on us, as has occurred in Sri Lanka and the Maldives.”