Some state governors have voiced their concern over Nigeria’s escalating debt profile, with fears that the country could face severe consequences if immediate measures were not taken to reverse the trend.
The governors spoke on Wednesday on the sidelines of the 2023 Induction for Re-elected and elected governors with the theme: ‘Governing for Impact (Building Sub-national Governance)’, organised by the Nigeria Governors Forum (NGF) at the Presidential Villa in Abuja.
Bauchi State governor, Bala Mohammed, expressed his concern, highlighting that Nigeria’s debt servicing requirement currently stands at approximately 95% of its revenue.
He cautioned that without intervention, the country was at the risk of financial collapse.
Additionally, he questioned why the World Bank had not alerted the country’s economic managers as the debt burden exceeded sustainable levels.
Governor Mohammed emphasised the need to address the macroeconomic realities affecting the states, including the inadequate sharing of oil proceeds.
He called for a comprehensive restructuring of the country’s economic management, advocating for increased involvement of States in decision-making processes.
According to him, Nigeria’s economy remains heavily reliant on a single sector, and even within that sector, a substantial portion of revenue has been borrowed upfront, necessitating a review of the federation’s structure.
He said, “our debt servicing requirement is about 95% of the revenue. And so the states are affected by this macroeconomic reality.
“The oil proceeds are not being shared. And we’re here celebrating success, what success?
“We are going to go under unless we do something inward to really correct our own perception, our own notions, and our own approaches to the management of the economy of the country.
“Honestly, you heard me ask a question. I wonder what the World Bank is doing. Apart from giving us grants, assistance in SFTAS, and of course loans, they should be able to raise a red flag, they should be able to tell the managers of our economy that we cannot continue to borrow endlessly.”
On his part, Pleateau State governor-elect, Caleb Mutfwang, echoed Governor Bala Mohammed’s sentiments, emphasising the importance of collaboration between the federal and State governments to develop effective policies for debt reversal.
Mutfwang said that creating national wealth was crucial to alleviating poverty and generating the necessary funds to repay debts.
He underscored the significance of diversifying and strengthening the economy, while improving productivity across all sectors.
Mutfwang said the goal of lifting people out of poverty and fostering wealth creation, which would contribute to increased tax revenues and enhanced internally generated revenue.
Katsina State governor-elect, Dikko Umar Radda, pledged to conduct a comprehensive assessment of the state’s debt profile upon assumption of office.
He expressed the intention to restructure the debt to ensure it aligns with the state’s obligations and benefits to its citizens.
“As soon as I am sworn in, there would be a comprehensive assessment of the debt profile with a view to restructuring it in order to meet the obligations for the people of the state,” Radda stated.
