‘Nigeria Has Debt, Not Revenue Problem,’- Peter Obi Counters FG

A former Governor of Anambra State, Peter Obi has said that Nigeria’s problem is not that of revenue, but of accumulating constant debt.

The argument posed by the former governor on Arise Tv is on the grounds that the Minister of Finance Budget and National Planning, Zainab Ahmed, said the country’s problems was that of revenue accumulation.

President Muhammadu Buhari had proposed to spend N16.39trn next year with a deficit of N6.26trn.

The budget deficit will be financed mainly by new borrowings of N5.01trn, N90.73bn from privatization proceeds and N1.16trn drawdowns on loans secured for specific development projects.

Based on the Debt Management Office statistics, Nigeria has a total public debt of N35.5trn.

Ahmed had on Friday during the public break down of the 2022 appropriation bill revealed that Nigeria’s debt service/GDP ratio of 73 per cent as of August 2021 is the highest among African top economies.

She had said, “This is proof that what we have is not a classic debt sustainability problem, but a revenue challenge.

“We have resorted to borrowing to finance our fiscal gaps. However, we believe that the debt levels of the Federal Government are still within sustainable limits.

“It is unlikely that our recovery from each of the two recessions would have been as fast without the sustained government expenditure funded partly by debt.”

But Obi argued, “We have a debt problem, not revenue problem. Borrowing is not the problem, you can borrow money, but what you use it for and issue of savings. You can even save when [you are borrowing].”

Obi said the issue with the Buhari’s administration is their lack of skills to double revenue using available resources.

“When four ministers said they spent their way out of recession, the first thing you do when you have a recession is that you have to cut your cost. You cannot continue to live the same way we lived when things were normal.

“You spent your way out of recession what did we achieve. Before recession, a bag of rice for example is about N12,000, we went into recession and we are now out of recession it is N30,000.

“If you must borrow when you are in recession to come out, you have to throw the money in critical areas that not just pull you out of recession, but can grow your economy and make it work.

“Can they tell us how it was spent? We are not America where people can borrow money to consume, it is a developed economy.”

Obi also said Buhari’s quest to reduce the debt service/GDP ratio to 50 per cent is not achievable.