The Centre for the Promotion of Private Enterprise, (CPPE), has said that Nigeria’s debt, including that of the Asset Management Corporation of Nigeria (AMCON) and borrowings from the Central Bank of Nigeria, (CBN), can hit N50 trillion within the shortest possible time.
The CPPE Chief Executive Officer, Dr. Muda Yusuf, said this during an event to present the 2022 first-quarter economic review of CPPE in Lagos on Monday.
Yusuf also advocated concessionary financing for the country, as opposed to commercial debts which are expensive.
He said, “The rising debt profile of government raises serious sustainability concerns. The Debt Management Office had reported that total public debt was N39.56tn as of December 2021. About 11.3 percent of this debt is owed by the states and FCT
“However, when we take account of borrowings from the CBN and the stock of AMCON debt, the debt profile would be in excess of N50tn.”
Although government tends to argue that Nigeria does not have a debt problem, the country has a revenue challenge, he said.
He explained that debt would typically become a problem if the revenue base was not strong enough to service it sustainably.
The government’s actual revenue could hardly cover the recurrent budget, which implies that the entire capital budget and part of the recurrent budget are being funded from borrowing which is not sustainable, he said.
He said, “We cannot continue to increase borrowing on account of the relatively low debt/GDP ratio”.