With few days to the expiration of President Muhammadu Buhari’s government and World Bank’s insistence on Nigeria not under obligation to take the $800 million loan offer, the Lagos Chamber of Commerce and Industry (LCCI) has frown at borrowing to fund subsidies or support certain ventures. Indeed, the LCCI views government’s fixation on debt accumulation as unhealthy for the economy and unsustainable in the short and long terms. The Director-General of LCCI, Dr. Chinyere Almona, made this known to New Telegraph, while reacting to the launch of the restructured Ministry of Finance Incorporated (MOFI) by President Muhammadu Buhari’s administration She said that continuous spend- ing of the money the country does not have in its treasury is unsustainable and consequently hampering the country’s Gross Domestic Product (GDP) growth rate.
It would be recalled that the World Bank Country Director, Shubham Chaudhuri, had said in a live interview on Channels TV that the fact that they had approved $800 million facility for Nigeria does not mean that the country is obligated to take the facility. He stated that the incoming administration had a choice to make whether to take the facility or not. The LCCI DG stated: “We, at the LCCI, frown at borrowing to fund subsidies or support uneconomic ventures. That is, spending the money we do not have – an act which is unsustainable.” “The LCCI is of the view that the government’s fixation on debt accumulation is unhealthy. Hence it should explore other avenues including opening equity opportunities and offloading/ sales of its real estate holdings.
The government should also make the problem of oil theft, with the removal of oil subsidy regime, a thing of the past to help create room for fiscal manipulation,” she added. Speaking further on the restructured MOFI launch, Dr. Almona explained that the chamber commended the administration of President Buhari for making MOFI the arrowhead of Nigeria’s efforts to optimise national assets. She said: “Most importantly, following the commendable launching of the restructured ministry of finance incorporated (MOFI) as the arrow- head of Nigeria’s efforts to optimise national assets by President Muhammadu Buhari on February 1, 2023, the LCCI wishes to urge that copious references should henceforth be made to the growth in the stock of financial assets that Nigeria owns in corporate equities, real estate and infrastructure spaces and the returns Nigeria is generating on them, each time the government of Nigeria is providing updates on the growth in the stock of the financial liabilities that Nigeria owes and the cost it is incurring on them, to provide local and global ob- servers a balanced picture of our financial position.
“This would motivate national asset managers, led by the MOFI, to grow our assets and the returns on them as well as motivate our national liability managers, led by the Debt Management Office DMO, to minimise our liabilities and the costs we incur on them with equal vigour. “Indeed, issuance of joint reports by MOFI and DMO would be most ideal going forward. One-sided updates on liabilities with no updates on assets when such updates were adequately available could well be blamed for some of the downgrades of Nigeria’s debt issuance risk profile and outlook.
“The rating outcomes would have been more favourable had updates on assets been provided side-by-side with updates about liabilities.” Besides, the recent data released by the Debt Management Office (DMO) puts Nigeria’s public debt at N46.25 trillion ($103.11billion) as at end-december 2022 compared to N39.56 trillion ($95.77 billion) in 2021. The growth reflected on both the domestic and external debt. The external debt stock increased to N18.70 trillion (N441.69 billion) in 2022 from N15.86 trillion ($38.39 billion) while domestic debt stock went up to N27.55 trillion ($61.42 bil- lion) in 2022 from N23.70 trillion ($57.39 billion). With N10.8 trillion budget deficit projected in the 2023 budget, the country’s debt stock is expected to increase in 2023.