Nigeria Owes N6.0 Trillion. Foreign & Domestic Debts equals 20.29% Of Her GDP- Senate

Oct 28, 2011 – Senate: Nigeria Owes N6.0 Trillion. Foreign & Domestic Debts equals 20.29% Of Her GDP

Nigeria’s Foreign and Domestic debts now stand at a total of N6.02 trillion ($39.72 billion).

This was disclosed by the Chairman of the Senate Committee on Local and Foreign Debts, Ehigie Uzamere, at the inauguration of the Committee by Deputy Senate President, Ike Ekweremadu.

According to Uzamere, it is alarming that the amount owed is even more than the Federal Government’s annual budget.

He stressed the need for the executive to focus more on borrowing for projects with self-repaying capacity and job generation, rather than borrowing to finance gaps in budgets that are largely recurrent.

Uzamere explained that compared to global limit of 40 percent, the country is still on safe ground with the 20.29 percent of Gross Domestic Product (GDP) that the total debt constitutes in Nigeria’s economy.

He however said that more hard work and a serious approach was needed to translate our debt into asset, in order to accelerate infrastructural development and boost the economy.

Uzamere said he was not comfortable with the Debt Sustainability Analysis, DSA, supplied by the Debt Management Bureau.

“There are other Debt Sustainability Indices (DSIs) that are more realistic and revealing than the Debt/GDP ratio. Do we have the capacity to repay this money considering our yearly revenue profile? What is the future value of the total debt in 10 years?”he queried.

The Senator  promised that his Committee would engage the executive to generate good quality data for its DSA, review the country’s debt policy and redefine its debt strategy.

He enjoined the government to embrace Public Private Partnership, as it was a sure way to hasten the provision of infrastructure with less financial burden to the government.