From Uche Usim, Abuja
To ensure Nigeria does not choke from current debt trap, the Fiscal Responsibility Commission (FRC) has advised the Federal Government to restructure its sovereign debts now pegged at N87.38 trillion.
It also wants the government to immediately end its culture of profligacy, while ensuring that unnecessary expenditures of ministries, departments, and agencies are reduced including the bogus amounts committed to debt servicing.
The deputy director and head, directorate of legal, investigation, and enforcement at the FRC, Charles Abana, gave the advice yesterday in Abuja, at a media/civil society roundtable on fiscal responsibility and debt management.
According to him, there is an urgent need for the Federal Government to consider state-contingent debt instruments where repayment obligations are tied to the capacity to repay. This, he noted, should include revenue bonds and payments linked to the price of oil.
“Restructure debts to ensure a longer period of amortisation in a bid to reduce the percentage of retained revenue committed to debt service. Target not more than 5 per cent of retained revenue for debt service in the medium term of four years,”, he explained.
Last year, global lenders advised developing countries like Nigeria with high debt exposure to strategically restructure the loans to avoid defaulting in repayment.
More so, the FRC, OrderPaper Advocacy Initiative and the Growth Initiative for Fiscal Transparency (GIFT) are strongly pushing for the amendments to the Fiscal Responsibility Act 2007 to give enforcement powers on the FRC to check corruption, instill prudence, transparency and accountability in the management of public finance in Nigeria.
Senior programme executive at OrderPaper Advocacy Initiative, Regina Udo said her organisation was engaging the National Assembly to advocate implementation of the FRA 2007 Act at the national and two sub-national levels as it relates to debt management and revenue remittances through the assembly’s public accounts committee.
She added that the enthronement of transparency in public funds management was key to having a vibrant economy.