Economists have called on the Federal Government to drastically reduce the cost of governance to address the country’s growing debts.
The experts on Friday in Lagos, said that the government needed to adopt an effective debt management strategy to address its current situation.
The Director-General of the Debt Management Office (DMO) Mrs Patience Oniha, had earlier in September, confirmed that Nigeria’s total debt profile as at March, 2022 stood at N41.60 trillion.
She confirmed it at her appearance at the engagement on the 2023 – 2025 Medium Term Expenditure Framework (MTEF) and Fiscal Policy Paper held by the House of Representatives Committee on Finance.
She attributed the high debt profile to shortfall in revenues and the deficit in the annual budget as approved by the National Assembly. These, according to her, increased the debt stock of the country.
Prof. Hassan Oaikhenan of the Department of Economics, University of Benin, Benin-City, urged government to be concerned about the country’s growing debts.
“If indeed the government is interested in addressing her growing debts, the logical starting point, which can be accomplished in the immediate term, will be to cut back, substantially, on the cost of governance, especially in such areas as the emoluments of national assembly members.
“Also cut down the retirement benefits of ex-governors, many of whom double as national assembly members, the huge cost of running the numerous cars in the convoy of government officials, the huge cost of maintaining and running the several aircrafts in the presidential airfleet, among others.
“If the government genuinely carries out reforms leading to significant reductions, and I recommend by as much as 75 per cent in the cost of governance arising from the aforementioned areas, the government may then be taken as being serious and sincere in its search for solutions to address the humongous debt owed by the country.”
Oaikhenan added that in the medium term, there was need for the government to endeavour to make the refineries to work.
He said doing so would save a lot of foreign exchange that was currently being expended on fuel import.
He added that more jobs would be created and the by-products from the refining process would also have huge beneficial spill over effects on the economy.
The expert also said that there was need for the government to create a business environment that was genuinely enabling, to replace the prevailing strangulating business environment, a sure way to attract domestic and foreign investors into the economy.
To this end, he said that there was dire need to address the problems of pervasive insecurity, significant deficits in hard and soft infrastructure, among others, noting that addressing these problems remained absolutely imperative.
In the long term, Oaikhenan said it behoves the government to think “creatively” in the direction of expanding the production base of the economy.
According to him, doing so will mean taking advantage of the country’s huge endowment in mineral and agricultural resources, especially in the areas of production of export and import competing goods.
He said, “it requires aggressive pragmatism, driven by doggedness and determination, rather than mere wishful thinking and glib policy pronouncements, such as what we find presently, to take the country from its present.”
Prof.Ndubisi Nwokoma, Director, Centre for Economic Policy Analysis and Research (CEPAR) University of Lagos, also spoke in the same vein.
“Government need to address the revenue challenge. For example, the loss of revenue through oil theft should be addressed, other oil exporting countries are gaining from the Ukraine/Russia crisis, but not Nigeria.
“There should be a drastic cut in the cost of governance in non-essential areas.
“However, if necessary, borrow more to solve the education sector crisis, eg. ASUU demands given its multiplier effects on the entire economy. In other areas, cut costs drastically.
“Government should also get concessions from the creditors for a few years regarding principal and interest payments,” he said.
