The presidential candidate of the Peoples Democratic Party, PDP, Atiku Abubakar, has accused the All Progressives Congress-led government of its excessive appetite for funds from the Central Bank of Nigeria which he claimed as led to the country’s economic downgrade by the rating agency Moody’s.
Atiku in a statement on Monday attacked the President, Muhammadu Buhari, for poor economic initiative where the government continues to fund ailing government’s enterprises further worsening the country’s economic situation.
The APC-led government has in the past few years relied on the Central Bank to fund some of its programs further deepening the country’s debt profile.
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Atiku said such addiction to deficit financing in addition to deficiencies to engender critical policies to target key areas to stop the economy from bleeding are some of reasons why Moody’s downgraded the country’s credit rating from B3 to Caa1.
Recall Moody’s reduced Nigeria’s credit worthiness last week observing that “oil production outlook” and the securitization of past advances from the CBN both remain uncertain.
It noted that “the securitization would bring a degree of fiscal relief but its lawfulness is being contested in Parliament and its passage uncertain.”
This followed ongoing horse trading and lobbying from the Executive to ensure the parliament overlooked the excessive borrowing members had frowned on while consideration the president’s request.
Moody’s latest rating coalesces with Fitch’s November 2022 lowering of the country’s rating by one level at B-, thus placing it six notches above default and on par with two countries with equally fragile economies – Angola and Ecuador.
Moody’s observed that, “Ultimately, the risk that a negative feedback loop sets in over the next couple of years between higher government borrowing needs and rising interest rates has intensified, exacerbating the policy trade-off between servicing debt and financing other key spending items.”
Atiku agrees stating that, “The APC-led government lacks the critical competencies to initiate and implement innovative solutions to our problems and deliver on their mandate with the desired impact.
“If given the opportunity to lead the country, I will act differently and change the economic direction of Nigeria for the better. I will undertake far-reaching fiscal restructuring to improve liquidity and the management of our fiscal resources,” Atiku said in a statement he personally signed.
He added that, “Among others, I will undertake an immediate review of government spending with a view to eliminating all leakages arising from subsidy payments.
“Second, I will stop all fiscal support to ailing and under-performing State-Owned enterprises.
“Third, I will take steps to improve spending efficiency by gradual reduction of government recurrent expenditures.
“Fourth, I will undertake a review of government procurement processes to ensure value-for-money and eliminate all leakages,” the PDP candidate said.
As a mark of last recourse, the former Vice President promised to “focus on non-debt financing by promoting a private sector-led Infrastructure Development Fund for the financing and delivery of key infrastructure projects.”