A professor of accounting and revenue management at the University of Benin (UNIBEN), Ofiafoh Eiya, has described the high ratio of debt servicing to revenue in Nigeria as ridiculous, alarming and reckless.
He condemned the use of debt to finance corruption in Nigeria.
Eiya of the department of accounting in the university told journalists in Benin yesterday that Nigeria spends over 70 percent of its revenue to service debt and wondered about its sustainability.
The don said the federal government is like an employee who earns N100,000 monthly from his employment but pays N70,000 as interest on previous loans, how can he survive? he queried.
Eiya affirmed that public debt is one of the tripods of fiscal policy instruments available to governments in the world over, for the regulation of the economy and meeting some macroeconomic objectives.
While arguing that it is unprofessional to use debt to finance recurrent expenditure but should be deployed towards capital formation, the accounting professor queried the infrastructural facilities into which the foreign and domestic debts in Nigeria have been deployed.
He, however, called for efficiency in the utilisation of the available resources, advising the government to carry out a national debt audit immediately for accountability on the use of the debt revenue and possible recovery.
“The government should undertake a financial, performance and compliance audit of our national debt in order to hold persons to account and justify the enormous amount being spent on debt servicing in the country”.
He also cautioned the government against national debt overhang.
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