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…Legislature responsible for the country’s debt woes
Amidst devastating insecurity, high prices of food, poverty, and rising inflation, the Civil Society and Legislative Advocacy Centre, on Monday, raised the alarm over the nonchalance displayed by the administration towards the country’s crippling debt crisis.
Barely two decades after exiting the Paris Club Debt, Nigeria has been plunged deeper into a debilitating debt trap following the borrowing spree embarked on by the country’s administration, the centre pointed out.
Speaking to journalists on “the role of private creditors in Nigeria’s debt crisis and the human cost”, the executive director of the civil society, Auwal Ibrahim Musa Rafsanjani, said, ” in the context of Nigeria, about 90 per cent of government revenue is devoted to debt servicing at the expense of development projects.”
Concerned that little to no attention is given to the debt crisis in the country, CISLAC in partnership with Christian Aid Nigeria, initiated one-year research with a view to finding a solution to the debt situation.
While asserting that private creditors in the international finance scene have set a new dimension in the Nigerian debt crisis, the director expressed worries over the impact of the situation on the government’s fiscal strength and its ability to respond to socio-economic emergencies.
He reflected on the policy options for addressing the debt emergency and maintained that “Nigeria is already in another debt trap. Records from both national and international financial and debt institutions regarding Nigeria’s debt reveal a state in crisis.”
“According to the Debt Management Office, Nigeria’s total public debt stock as of June 30, 2022, was N42.84 trillion.”
“It is instructive to recall that Nigeria’s debt service cost outweighs its revenue with clear signs of economic dangers ahead.
“There are implications for this rising debt stock in Nigeria with total external debts amounting to about $ 40 billion and a private credit composition of $ 15.9 billion which represents 39.8 per cent of total external debt stock. Euro bonds take the bulk of the commercial loans with a total portfolio of $ 15.62 billion.”
The director criticised the lack of transparency on lending and borrowing and the inability to track funds attributing the predicament greatly to the nonchalance of lawmakers in granting requests for loans at the detriment of Nigerians whose interests they were elected to protect.
“We are deeply concerned with the lack of vigorous scrutiny and attention by the lawmakers in granting requests for loans without reflecting the provisions of the Fiscal Responsibility Act, and the greater implication of the nation’s economic state.”
“The Nigerian legislators have a constitutional and legislative mandate to approve loan requests only on the basis of public interest and should put this clause as a prerequisite to any approvals they might want to give to the president’s requests for further borrowings.”
Rafsanjani revealed that CISLAC with support from its partner, Christian Aid is passionate about enhancing the urgency with which the governments address the country’s debt crisis.
He said that this solution included research commissioned to fully highlight the Nigerian context and dimensions of the indebtedness to private creditors for policy options and deliberate efforts to end it.
“We have launched a research product that centres on revealing and challenging the role of private creditors in hindering people’s recoveries to enhance the urgency with which the international community must address the sovereign debt crisis.”
“This research was commissioned with support from Christian Aid, to fully highlight the Nigerian context and dimensions of the indebtedness to private creditors for policy options and deliberate efforts to end it.”
“It aims to contribute to an international financial architecture and macroeconomic environment that enables the fulfilment of human rights and the undertaking of climate action in economics that centre on care.”
The Centre urged, “all state and non-state actors to heed this call and minimize collective actions to nip this issue in the bud as we head towards a fiscal cliff, in the interests of the increasing population of poor Nigerians whose lives are affected by the crisis.”
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