New Telegraph

‘Nigeria’s N42.84trn debt mortgaging country’s future’

A former acting Managing Director of Belemaoil Nigeria Limited, Engineer Sunday Adebayo Babalola, has said that Nigeria’s N42.84 trillion debt profile is negatively impacting businesses, companies, and organisations as well as mortgaging the future of Nigerians.

He said such stupendous debt, spent on projects and programmes, that can not pay back their loans, had retrogressed the country. Speaking in an interview in Lagos, Babalola, who is currently Director of All Grace Energy, urged the Nigerian government to stop borrowing for projects that cannot generate returns to pay back their loans.

Recall that the Director-General of the Debt Management Office (DMO), Mrs Patience Oniha, recently revealed that domestic borrowing had pushed Nigeria’s total public debt stock from N41.60 trillion as of March 2022 to N42.84 trillion as of June 2022. This showed an increase of N1.24 trillion in three months, according to the Debt Management Office.

DMO had stated that the total public debt stock, representing the domestic and external debt stocks of the Federal Government of Nigeria, the 36 state governments and the Federal Capital Territory, was N42.84 trillion ($103.31bn) as at June 30, 2022, and that the comparative figures for March 30, 2022, was N41.60 trillion ($100.07bn).

 

It was also revealed that as at December 2020, the debt stock of the federal and state governments and the Federal Capital Territory was N32.92 trillion but by December 2021, it rose N39.556 trillion. Babalola said: “Nigeria’s N41.60 trillion debt, obviously, is a mortgage of the future of the country.

 

Chief Olusegun Obasanjo recognised that when he was the President of Nigeria. “He understood that the country being in debt was not a good way to go and that we cannot continue that way. He decided to engage in debt negotiation, paid a substantial part of the debt and later got the rest forgiven by the creditors.

“He succeeded in doing that and that put us in good status. But we later started borrowing afresh. It is not good at all. It is basically describable bad. “The people in government should be able to look at where they are going wrong and be sincere with themselves and correct those things.

There are so many things that can be done. “The govenrment should the right thing. The country has many untapped resources which can be harnessed and they will bring foreign exchange to the nation and create employment opportunities for the teeming unemployed or under-employed people of this country.

“But another problem is that in harnessing the untapped resources, corruption may also set in. So the people must change. They just have to make up their mind that they are not going in that direction and say let us change. “They must know that the money they are looting now will not even serve their children because it is not legitimately gotten. I have never seen where corruptly made money has been useful to the children of the people that amassed the money.”

Babalola, a retired Deputy  Director of the now-defunct Department of Petroleum Resources, warned that deficit budgeting was an unsound national financial management strategy. He said that Nigeria had been running a deficit budget for many years and called on the government to address deficit budgeting. He warned that the future of Nigeria was bleak if the government continued with deficit budgeting.

He said: “Any economist and even non-economist will tell you that it is not good. When you have N10 and you spend N15, there will be a time when the whole thing will collapse. “We have seen it happen in many countries that eventually collapsed. I do think that countries are declared bankrupt just like that when they are not.

When they are bankrupt so many other countries can also go bankrupt because of it as there is inter-dependence of countries. You can not continue to run on deficit.

 

“Can you drive your car with zero petrol? Is there anything like negative petrol? If you can not drive your car, how do you expect the country to move forward with negative petrol? Money is the petrol and the livewire.

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