Peoples Democratic Party (PDP) presidential candidate and former vice president, Atiku Abubakar, has challenged the federal government to review the current utilisation of all borrowed funds and ensure that they are deployed more judiciously.
The former Vice President, who was reacting to revelations that Nigeria’s debt servicing was surpassing the federal government’s retained revenue by N310billion in the first quarter of the year, also demanded improved spending efficiency and drastic cut on unnecessary and wasteful expenditures.
He said government must ensure that all borrowed funds are for priority infrastructure projects that would generate income, boost output, and put the economy on the path of sustainable growth.
Recall that on Thursday, Nigeria’s Finance Minister, Zainab Ahmed, disclosed that the cost of servicing Nigeria’s debt has surpassed the federal government’s retained revenue by N310 billion in the first quarter of the year.
Describing the situation as worrisome, Atiku, took to his verified Twitter handle, said this action must be in breach of all known reasonable debt-sustainability thresholds, adding that it puts a big question mark on the capacity of the government to manage its rising debt profile without endangering macroeconomic stability.
“Indeed, I am concerned that this action is already exposing Nigeria to financial stability issues as we slip from a medium risk of debt distress to high risk of debt distress,” he said.
Atiku recalled that he had, on several occasions, warned that not only is the fiscal cost of government’s indiscriminate borrowing so enormous but has even greater opportunity costs as investments in critical areas are sacrificed, including education, health, and other basic services.
“This is certainly detrimental to Nigeria’s long-term growth.
“I urge the government to as a matter of urgency do the following: Take immediate steps to slow down the rate of debt accumulation by promoting more Public Private Partnerships in critical infrastructure funding and identifying more innovative funding options.
“Review the current utilization of all borrowed funds and ensure that they are deployed more judiciously.
“Specifically, government must ensure that all borrowed funds are for priority infrastructure projects that would generate income, boost output, and put the economy on the path of sustainable growth;
“Review the country’s debt strategy by focusing on concessional and semi-concessional sources with lower interest rates and relatively long-term maturity. The government must reduce the issuance of short-dated debt instruments;
“Take steps to improve its spending efficiency and drastically cut unnecessary and wasteful expenditures – AA,” he wrote.