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The Federal Government has debunked former vice president, Atiku Abubakar’s record on Nigeria’s debt profile, describing it as criticism anchored on a false premise and innuendos.
Atiku had in an article titled: ‘Nigeria In Financial Crisis: Robbing Our Children to Pay for Our Greed’, released on Tuesday, said he was shocked that Nigeria spent a total sum of ₦943.12 billion in debt servicing, while the Federal Government’s retained revenue for the same period was only ₦950.56 billion.
He said the figures, which he obtained from Nigeria’s First Quarter 2020 financial reports in the Medium Term Expenditure Framework and Fiscal Strategy, represent a 99% debt to revenue ratio.
“No one should be deceived. This is a crisis!,” he said. “Debt servicing does not equate to debt repayment”.
“The reality is that Nigeria is paying only the minimum payment to cover our interest charges. The principal remains untouched and is possibly growing.”
But the Federal Government denied former vice president’s figures, stating that “it is not in the Medium-Term Expenditure Framework and Fiscal Strategy Paper, where he claimed he got it from”.
Minister of Information and Culture, Lai Mohammed, in a statement on Wednesday, said the administration welcomes criticism but must be constructive and accompanied by verifiable facts, rather than conjectures and innuendos.
Contrary to Atiku’s claim, Mohammed said the debt service provisions in the annual budgets included principal repayments, interest payments. Therefore, “the statement that debt servicing does not equate to debt repayment is not only wrong, but ill-informed”.
“There is no doubt that former Vice President Atiku Abubakar loves our country and wishes it well, otherwise he would not have sustained his serial quest for the country’s highest position,” he said.
“One can only hope that his resort to the use of such words as ‘precipice’, ‘foreclosure’ and ‘economic ruin’ does not reflect anything but best wishes for the country at this time.
“We are also not able to ascertain the source of the first quarter figures of N943.12 billion for debt servicing and N950.56 billion for retained revenue, which he also quoted.”
The minister further stated that, contrary to statement by the 2019 presidential candidate that the country had experienced alarming and unprecedented increase in the ratios of debt to Gross Domestic Product and debt service to revenue, Nigeria’s debt ratio to GDP is one of the lowest in the world at 19.00 per cent as at December 31, 2019.
“One of the reasons why debt service to revenue is high is because revenue generation in Nigeria has been low, with over-dependence on the oil sector. This is corroborated by the fact that the ratio of Nigeria’s tax revenue to GDP is one of the lowest in the world at about 6 per cent,” he said.
He added that, unlike what obtained in the past, when the nation borrowed to service the crass indulgence of a few fat cats, the loans being obtained by the current regime were primarily used to finance infrastructure projects, which include roads, railways, bridges and power.
“We have said that in the face of massive infrastructural decay, no responsible government will sit by and do nothing. This administration’s borrowing, therefore, is aimed mostly at revamping our infrastructure.”
