The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has defended the rising debt under President Muhammadu Buhari, stating that borrowing is an essential part of running a government.
Emefiele said it is not a crime to borrow, as debt is part of fiscal responsibility. He explained that companies also borrow to operate their business, but what’s important is to ensure proper usage of the disbursement.
The central bank Governor said at the National Dialogue on Nigeria’s rising debt profile, titled: “The Rising Public Debt in Nigeria and the Challenges of National Development”.
Emefiele, who was represented at the event by Assistant Director, Monetary Policy Department, CBN, Tawose Joseph, suggested that the loan obtained by the government should be monitored.
Recall that Prime Business Africa had reported that the World Bank ranked Nigeria fourth on the list of chronic debtors in the world, overtaking Vietnam, while falling behind India, Bangladesh, and Pakistan.
Among the top five debtors ranked by the World Bank, it was gathered that only Nigeria failed to reduce its debt, which increased from $11.7 billion as at June 30, 2021, to $13 billion at the end of the first half of 2022.
Speaking on behalf of Emefiele, Joseph said, “Debt is part of fiscal responsibility. Debt is never a crime or a sin. Private entity also burrows to survive. But what matters most is the quantum of the debt and the usage of the debt as well. If a money is burrowed as a result of shortage of income generation.
“When you compare the income and expenditure and is efficiently used is part of government responsibility. But where the fear is when it is above the threshold.
“CBN understands that when there is crisis in an economy, then the burden of debt would be something. That is why the conventional and non-conventional instruments is there to ensure price stability in the economy.” he said.