Economists and communication experts have asked that the Nigerian government deploy its borrowed funds for capital projects rather than service recurrent expenditures.
The charge was given at a panel discussion on the theme ‘Debt Burden and Quest for Economic Recovery’. The event was the official launch of online business newspaper, Prime Business, an independent publication by multimedia company Newstide Publications Limited.
Development economist, data scientist, project finance expert and keynote speaker at the event, Dr. Bongo Adi, said that “90% of our revenue is used in debt servicing”.
Stating that past borrowing by the government hasn’t served Nigeria well, Dr. Adi said it was however important that Nigeria recovers its economy. “If you look at average growth between 2015 and now it is below 2%, so it is very important that the economy is recovered.”
According to him, even though debt was increasingly becoming important in today’s world, the question that “do we really need debt to recover the economy?” still begs for an answer. He noted that there is a high cost to borrowing. “Yes, debt may be cheap, but the cost of borrowing is high. So in the end, debt may actually not be cheap.”
Also speaking, renowned career diplomat Ambassador Ejeviome Otobo, said that “any country that begins to borrow to pay its recurrent expenditure is in deep trouble.” According to him, it was bad enough that the country was borrowing so much, “but it is even worse that we are using it to pay for recurrent expenditure.”
Publisher/Editor-in-Chief of Prime Business, Dr. Marcel Mbamalu said with the increasing debt profile Nigeria was on a sloppy slide. According to him, much as the government was trying to play smart with its unwholly borrowing habit, it is disheartening that the Nigerian people would be made to pay for the indiscretions in years to come.”
Admitting that the media had an integral part to play, Dr. Mbamalu said it was not enough that they report the government’s borrowing, but fail to report what the money borrowed was being used for. He charged media practitioners to hold the government accountable by monitoring how those borrowed funds were expended.
“The media is not doing enough in probing and playing the watchdog role. There are ample cases of media gagging and state-sanctioned bullying of the press, coupled with the lack of transparency in the loan deals with China.
“The media can do better by keeping the issues fresh and constantly asking questions of leaders who go borrowing. It is not enough to report on the new debts, questions should be asked as to what legacy projects have come out from debts incurred years ago and for which deductions are being made at sources, as well as, what the opportunity costs there are. That is surely a first step to keeping the conversation on debts afresh.”