Some Civil Society Organisations, (CSOs) have raised concern over Nigeria’s rising debt profile describing it as a ‘debt trap’ already worsening the country’s crisis-ridden economy and costing the nation its foreign assets.
The CSOs consisting of the Civil Society Legislative Advocacy Center, (CISLAC) and Christian Aid in partnership with Transparency International, TI), noted that Nigeria is presently in a debt crisis with a fiscal deficit well above the statutory threshold of 3 percent, an increasingly unsustainable debt profile and a rising debt servicing that has been worsened by rising interest rates among others.
Speaking at a media briefing yesterday in Abuja, Executive Director, CISLAC, Auwal Musa-Rafsanjani, lamented that the National Assembly has failed in its constitutional duty of check-mating the excesses of the Executive arm of Government, and is therefore largely to blame for the current debt crisis the nation is facing.
He said due to the ‘rubber stamp’ attitude of the legislators, who sign or approve loans that the Executive has been taking in the last few years without fully grasping its implication to the economy and generations yet to come, Nigeria is now in a debt trap, as the Government keeps taking loans from private creditors hence deepening the debt crisis and increasing human cost.
Auwal pointed out that “barely two decades after the buyback deal by the then President Olusegun Obasanjo, from the Paris Club debt relief agreement, Nigeria is already in another debt crisis with an inevitable human cost.
“With limited access to further financing on concessional terms and with a growing presence and influence of private creditors in its debt profile, Nigeria’s national debt is growing and increasingly putting the country in a precarious position.
Senior Programme Coordinator, Christian Aid, Uzor Uzoma, explained further that most of the government’s borrowings are done without recourse to the law, adding that sadly, the lawmakers do not read through properly to ensure that the Constitutional provisions with regards to borrowings are adhered to. She advised Nigerians to get their Permanent Voter Cards (PVCs) and elect worthy leaders in the coming general elections.
Nigeria’s net foreign assets dropped from N7.1 trillion to N4.8 trillion in July 2022, the largest month-on-month drop since 2019; and this is seen to be as a result of an increase in foreign liabilities such as increased borrowing from the debt market or from direct lending facilities, according to media reports.