Former Vice President, Atiku Abubakar, has again raised concerns over the impending financial crisis, as the country’s debt-to-revenue ratio hits 99 per cent in the first quarter of 2020.
Lamenting that the Federal Government was robbing Nigerian children to pay for the greed of political office holders, he insisted that urgent steps should be taken to drastically reduce government’s expenditure, especially on wasteful projects.
His words: “We are on a precipice and if revenue figures do not rise quickly, Nigeria risks a situation where revenue cannot even sustain its debt servicing obligations. Meaning that we may become insolvent and our creditors may foreclose on us, as has occurred in Sri Lanka and the Maldives.”
Citing figures released by the Finance Minister in the 2020 Medium Term Expenditure Framework (MTEF), Atiku said he was shocked at the revelation from Nigeria’s first quarter 2020 financial reports in the MTEF and Fiscal Strategy from the Ministry of Finance, Budget and National Planning.
“This shows, alarmingly, that whereas Nigeria spent ₦943.12b on debt servicing, Federal Government’s retained revenue for the same period came to only ₦950.56b, representing a debt-to-revenue ratio of 99 per cent,” he stated.
In a statement yesterday, Atiku noted, “As part of an administration that paid off Nigeria’s entire foreign debt, I am concerned about the unprecedented increase in our debt to Gross Domestic Product (GDP) ratio and debt-to-revenue ratio. The alarm I sounded last year is now sounding louder.
“Not only have we squandered our opportunities, but we have also squandered the opportunities of our future generations by bequeathing to them a debt that they neither incurred nor enjoyed.”
He advised the Federal Government to take immediate steps to drastically reduce its expenditure, especially on wasteful projects, such as maintenance of the Presidential Air Fleet and unnecessary renovation of buildings that could serve as they are, limousine fleet for top government officials, overseas travels and treatments, and the ₦4.6b Presidential villa maintenance budget, among others.
“We cannot be on the verge of economic ruin, while still maintaining a Presidential Air Fleet that has more planes than those of the countries from whom we take loans. In fact, Nigeria must sell those planes and channel the revenue to other vital areas of need, while taking additional steps to reduce the cost of governance.
“The Federal Government cannot continue to justify these unsustainable numbers by pointing at the country’s debt-to-GDP ratio. That is only half the picture.
“Our debt-to-revenue ratio paints a much more realistic portrait of our financial situation, especially as our revenues are majorly tied to oil and gas, which are very vulnerable to global shocks,” he stressed.