NECA worries over Nigeria’s huge debt

Nigeria Employers’ Consultative Association (NECA) says Nigeria’s increasing debt burden could have negative implications on developmental capacity of the economy.
The Director General of NECA, Mr Timothy Olawale, said at a forum in Lagos that that the debt burden was worrisome and needed to be checked.
Olawale said that the debt burden was worrisome because about 25 per cent of the 2019 budget size of N8.8 trillion amounting to N2.140 trillion was going into servicing of debts.
He also said that the Federal Government’s continued borrowing within the domestic market was limiting the real sector from accessing funding for expansion and growth.
“’The real sector should be able to access funds which should ultimately lead to increased employment opportunities within the economy.
“’Latest figures released by the Debt Management Office (DMO), showed that government’s domestic debt profile rose to N15.814 trillion in September, 2018 from N15.629 trillion in June, 2018 (1.19% increase),” Olawale said.
He said that the amount proposed for debt serving in the 2019 budget could have a negative effect on the developmental capacity in spite of government’s financial managers’ argument that the rate of increase was within a manageable limit.
Olawale cautioned that while the effect of the increasing debt might not be immediate in totality, it could be catastrophic in the long term with a chunk of revenue consumed by debt servicing to the detriment of infrastructure development.
He urged the federal and state governments to take steps aimed at cutting the cost of governance and recurrent expenditure.