The Peoples Democratic Party (PDP) Presidential Candidate, Atiku Abubakar, has advised the Federal Government to take immediate steps to reduce Nigeria’s debt accumulation by promoting more Public Private Partnerships in critical infrastructure.
Abubakar in a statement he issued in Abuja on Friday also advised government to identify more innovative funding options for critical infrastructure.
He said that the Thursday’s revelation by the Finance Minister that the cost of servicing Nigeria’s debt had surpassed the Federal Government’s retained revenue by N310 billion in the first quarter of year 2022 was very worrisome.
This according to him breach of all debt-sustainability thresholds and puts a big question mark on the capacity of Nigeria 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.”
Abubakar said he had on several occasions warned that not only was the fiscal cost of government’s indiscriminate borrowing so enormous but has even greater opportunity costs as Nigeria sacrifice investments in critical areas, including education, health, and other basic services.
“This is certainly detrimental to Nigeria’s long-term growth,” Abubakar said.
“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;” he said.
Abubakar also advise government to review the country’s debt strategy by focusing on concessional and semi-concessional sources with lower interest rates and relatively long-term maturity.
He said that government must reduce the issuance of short-dated debt instruments and take steps to improve its spending efficiency and drastically cut unnecessary and wasteful expenditures. END