Chartered Institute of Treasury Management (CITM) has cautioned the federal government against new borrowing, saying such could plunge the country into debilitating debt.
The registrar of CITM, Mr Olumide Adedoyin, stated this yesterday in Abuja, against the backdrop of new borrowing and mounting debt by the federal government.
According to him, any new borrowing should be strictly for critical, revenue-generating infrastructure projects and should be on highly concessional terms low interest, long tenor from multilateral institutions.
“As at mid-2024, Nigeria’s debt picture is characterised by rapid growth, a changing composition, and significant fiscal pressures.”
He, however, commended the federal government for the 2025 revenue surplus, describing it as an opportunity to fund transition without further debt.
According to him, the revenue surplus of 2025 should be seen as a golden opportunity to fund this transition without resorting to further debilitating debt.
“The Nigerian government is correct to celebrate improved revenue, as it is the primary tool to escape the debt trap.
“However, the Rt Hon Speaker Abbas Tajudeen warning is the necessary counterbalance, highlighting that the current debt level is unsustainable and threatens the nation’s economic future.”
Adedoyin stated that the path forward is not through more borrowing, but through radical fiscal discipline and aggressive revenue generation.
Others, according to him, include strategic management of existing debt and creating an environment where the private sector can drive growth.
To further stop borrowing, he said the solution required a multi-pronged approach focused on radical increases in revenue and strategic debt management.
He stated that there was a need for aggressive revenue mobilisation, adding that the most important solution was to expand the tax net.
This, according to him, is by systematically bringing millions of informal sector businesses and high-net-worth individuals into the tax system through technology and data-driven approaches.
He added that there was a need to focus on taxing wealth and consumption, not just income, stressing that it was imperative to improve non-oil revenue.
He listed these to include solid minerals, agriculture, and the digital economy, which he said must be prioritised to generate export earnings and taxes.
He also said that the federal government must ensure that the Nigerian National Petroleum Corporation (NNPC) Ltd. meets its full remittance obligations to the Federation Account, saying transparency in the oil sector is non-negotiable.
On debt restructuring, he urged the federal government to proactively engage with bilateral and commercial creditors to restructure debt terms—extending tenors and lowering interest rates to ease the annual repayment burden.
He called for a drastic reduction in government waste, corruption, and the bloated cost of governance, while urging the merger of redundant agencies and strict enforcement of the Fiscal Responsibility Act.
According to him, the saved subsidy funds must be channelled transparently into productive investments and targeted social safety nets, not absorbed into general spending.
