The presidency has dismissed fears that the government is accumulating debts insisting that “Nigeria is actually under-borrowing.”
The Special Adviser to President Bola Tinubu on Economic Matters, Tope Fasua, made the submission during a Channels Television interview on Tuesday, in which he reacted to fears that Nigeria’s international debts were on the rise and getting out of hand.
He argued that, contrary to widespread fears, national debts have been on the decrease since the advent of the Tinubu administration and at 39 per cent of Gross Domestic Product (GDP), Nigeria is actually under-borrowing.
He added that states are also able to pay their debts, and there is nothing to be worried about.
The presidential aide argued further that the government is only taking loans for developmental projects and not for wastage or embezzlement.
“At 39 per cent of GDP, Nigeria is actually under-borrowing. And of course, regarding debt servicing, the last data I got last month was 64 per cent lower. In 2022, there was a point when our debt was as high as 120 per cent. We used all our revenues to service debts, and we had to borrow 20 per cent extra just to service that same debt.
“So currently, our debt management is not so bad. I think we are doing a great job in the area of debt management, if you ask me. For one reason or the other, right now, the states have been able to pay down 42 per cent of their debts between 2023 and 2024.
“A country is run like a company. A company that is thriving…let’s call it a conglomerate, thinks about how to pay down debt. We service debts…We pay some and take new ones because we are growing and want to expand our horizon in the global market. You have to go into that part of productivity, which may necessitate you to take more loans and pay down some debts,” he said.
Despite his argument, Fasua added that the federal government is open to constructive criticism.
In his words, “Of course, I welcome criticisms in terms of looking at what our priorities are, what kind of debts we should be taking, what kind of interest rates to look at, who to take the loans from, how we are managing the debts, and how we can ensure that the money is actually going into what it is meant for. Are there cash flow projects that can be brought in to service the debts, even if we don’t have funds to pay everything?”
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