Immediate past Director General of the Lagos Chamber of Commerce and Industry, Dr. Muda Yusuf
THE Immediate past Director General of the Lagos Chamber of Commerce and Industry, Dr. Muda Yusuf, has asked the Federal Government to review its spending structure in view of the country’s debt profile.
Yusuf said it had become necessary to check the cost of governance.
In an interview with Prime Business Africa, the ex-LCCI boss said the increasing stock of foreign debt should be a major concern to the government.
According to him, the capacity to service the current stock of debt owed by the country raises serious economic sustainability concerns.
He said, “The growing national debt is a cause for concern as the debt profile grew from N12.6tn in 2015 to N33.1tn in March 2021, an increase of 162%. Although about 15% of these were debts owed by the state governments.
“The capacity to service the current stock of debt raises serious sustainability concerns. The opportunity cost of high debt service commitment for the economy and citizens is very high. There is also the exchange rate risk inherent in the exposure to mounting foreign debt which we need to worry about.”
Yusuf noted that as the currency depreciates, the burden of servicing foreign debt would intensify.
He stated that the debt profile of the country underscored the imperative of appropriate policy choices to attract equity domestic and foreign private sector capital for economic and social infrastructure financing.
“It is necessary to review the spending structure of government and the cost of governance. The ballooning recurrent expenditure, in the face of declining revenue is a cause for concern,” he added.