President Bola Tinubu has stated that Nigeria is on the path of destruction should the country continue to service its debt with 90 per cent of revenue generated.
Tinubu said difficult changes will be made to ensure debt doesn’t consume 90 per cent of Nigeria’s revenue and it will cause short-term discomfort for Nigerians.
He made this known at the annual Nigeria Bar Association (NBA) conference on Sunday in Abuja themed “Getting it Right: Charting the Course for Nigeria’s Nation-Building”.
The President said the changes are necessary for Nigeria to be respected among the great nations of the world, “Can we continue to service external debts with 90% of our revenue? It is a path to destruction.
“It is not sustainable. We must make the very difficult changes that are necessary for our country to get up from slumber and be respected among the great nations of the world,” he said at the conference.
He said the reforms to make Nigeria a great nation will be painful, but they are vital to bequeath a great and prosperous country to generations yet unborn.
“We cannot have the country we desire without the reforms we have initiated. It is painful at the beginning, in the short and medium term, but we must do what we have to do to take this nation to its great destiny,” the President stated.
Tinubu added: “It is not about you, and it is not about me. It is about our generations yet unborn, for whom we must bequeath a great and prosperous country.”
One of the policies made by Tinubu is the removal of fuel subsidy, which led to the price of fuel rising from N189 per litre to about N568 since he announced on 29 May 2023 that his administration will stop subsidising Premium Motor Spirit (PMS).
Tinubu also approved the devaluation of the naira on June 13 and the unification of the exchange rates in the official market. This raised the dollar rate up from N471.67/$1 to N771.69/$1 as of Friday.
Meanwhile, the World Bank had also expressed concern about Nigeria’s debt-to-revenue ratio, stating that in 2021, debt service gulped 83.2 per cent of revenue and 96.3 per cent in 2022.
“The fiscal deficit was estimated at 5.0% of GDP in 2022, breaching the stipulated limit for a federal fiscal deficit of 3 percent. This has kept the public debt stock at over 38 percent of GDP and pushed the debt service to revenue ratio from 83.2 percent in 2021 to 96.3 percent in 2022.”
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