‘Public debt expansion rate outweighing revenue mobilisation capacity’
Stakeholders in the financial sector of the economy have expressed concerns that Nigeria’s public debt in the last five years had increased at an average of 21.02 per cent while the economic growth figure averaged 0.15 per cent.
One of such stakeholders, the Fiscal Policy Partner and Africa Tax Leader at PricewaterhouseCoopers (PwC), Taiwo Oyedele, who is also the guest speaker with a paper titled “Nigeria’s Rising Debt Profile: Issues and Implications for Sustainable Economic Development” at the 2021 Fellowship Investiture programme of the Chartered Institute of Bankers of Nigeria (CIBN), held in Lagos, said revenue, on the other hand, expanded by an average of 5.19 per cent.
According to him, by implication, the rate of expansion in public debt in Nigeria is fast outweighing the revenue mobilisation capacity of the government, adding that this consequently expands the debt-to-Gross Domestic Product(GDP) ratio from 20.32 per cent in 2015 to 34.98 per cent in 2020.
He said the pace of increase in the public debt stock, particularly, raised the fiscal sustainability concerns on Nigeria.
Speaking also at the event, virtually, the Director-General of the World Trade Organisation, Dr. Ngozi Okonjo-Iweala, who is also one of the fellowship awardees at the event, commended the banking sector for its contribution to the development of the country and indeed the continent.
She said: “I’m honoured to be made a fellow of a prestigious Chartered Institute of Bankers of Nigeria. I thank the institute for the excellent work it has done to uphold the professional and ethical standards of the Nigerian Banking Industry as well as its effort to educate new generations of bankers.”
She noted that while the banking sector has contributed to the development of the country, there is still so much to be done and the emerging FinTech sector has a strong role to play.
On his part, the Deputy Governor, Central Bank of Nigeria (CBN), Dr. Kingsley Obiora, said the launch of the eNaira by President Muhammadu Buhari has positioned Nigeria as a global leader in innovation in the financial and payment system landscape.
“It is not a coincidence that the president launched the eNaira spurring a historic first and introducing Africa’s first digital currency, and that is not a mean feat because it makes and positions us again as a global leader in innovation in the financial and payment system landscape.
“I am very happy that one of us today, John Obaro, has always been a leader in payment system landscape; I believe that these core values of integrity, professionalism, innovation, on and ethics should also be in addition to excellence in all things we do as the core of our growth and development as a country.
“I do strongly believe that these attributes will help us to grow and get to the Promised Land,’’ he said.
A total of 237 individuals have conferred awards at the event; 14 honorary fellows, 77 elected fellows, and 146 honorary senior members.
The CIBN President, Dr. Bayo Olugbemi, urged stakeholders in the banking and finance industry to support efforts and initiatives of the government aimed at improving the economy toward inclusive growth and development.
He, however, urged the government to do all to minimise excessive borrowings.
“I would like to propose that we continually strive to rein in our rising debt profile. Just like the Latin Americans, let us embrace import substitution models that ultimately promote homegrown products and services, economic growth, and sustainable development.
“We must also pursue the path of efficiency, ensuring that all recurring costs that may potentially lead to excessive borrowing are reduced to the barest minimum,’’ he said.