•Governors wonder why W’Bank/IMF failed to raise alarm
From Juliana Taiwo-Obalonye, Abuja
Returning and incoming governors on Wednesday, criticised Nigeria’s mounting debt, with some expressing concern that the nation might collapse if urgent steps were not taken to halt the trend.
Rising from the just concluded 2023 induction Programme for governors, organised by the Nigeria Governors Forum (NGF), some governors expressed the view that the country cannot continue to borrow perpetually.
The governors were responding to the warnings by Director- General of World Trade Organisation, (WTO), Ngozi Okonjo – Iweala, that the incoming and re- elected governors must be mindful of acquiring huge debt profile for their various states across the country.
She had at the opening of the induction, said it has become imperative for governors to focus on debt management because the country has challenges on the fiscal, debt and monetary policy fronts as the nation’s gross debt level had risen from N19.3 trillion in 2015 to $N91.6 trillion in 2023, adding that the Debt-to-GDP ratio has almost doubled from 20 percent to 39 percent over the same period.
The Governor of Bauchi state, Bala Mohammed, for instance, bemoaned the fact that the nation’s debt service costs accounted for 95percent of its income and issued a dire warning that without action, the nation would collapse.
He also questioned why, when the debts rose above the acceptable level, the World Bank did not alert the country’s economic managers.
“Honestly, you heard me ask a question. I wonder what the world bank is doing. Apart from giving us grants, assistance in SFTAS and of course loans they should be able to raise a red flag, they should be able to tell the managers of our economy that we cannot continue to borrow endlessly.
“Our debt servicing requirement is about 95per cent of the country’s revenue. And so the states are affected by this macro economic reality. The oil proceeds are not being shared. And we’re here celebrating success, what success? We are going to go under unless we do something inward to really correct our own perception, our own notions and our own approaches to the management of the economy of the country.
“It is a monolithic economy. And yet even where we are getting money, we have taken so much upfront, the Federation has to be looked at as a structure because states have to have a say in the management of the economy” he said.
For his part, the Plateau Governor-elect, Caleb Mutfwang, while corroborating with what Mohammed said on the need to reverse the country’s debt situation, stated that there is need for collaboration between federal and state governments in order to create right policies to reverse the situation.
He noted that the way to go is to look for ways and means of creating wealth as a nation so that more Nigerians would come out of poverty.
“This is both a national and sub national issue. We at the sub-national level will be collaborating with the federal government, as members of the National Economic Council to come up with the right policies that we’ll be able to reverse our debt situation. And of course, reversing debt is not rocket science, you have to create wealth, you have to add more money to be able to pay your deaths. So we must look at ways and means of creating wealth as a nation.
“For us back on the Plateau, of course, we’ll be looking at how to be able to boost our economy, diversify our economy, and ensure that there is effectiveness in all the productive sectors of our lives. And at the end of the day, the bottom line, is that our people must come out of poverty and begin to create wealth, so that we can be able to pay more taxes, improve our Internally Generated Revenue (IGR). And then from there, we can be able to reduce our debts” he said.
The Katsina State governor-elect, Dikko Radda, said as soon as he is sworn-in, there would be a comprehension assessment of the debt profile with a view to restructuring it in order to meet the obligations for the people of the state.
Asked if he subscribed to the idea that the World Bank and other international agencies should have raised redflag that Nigeria debt is getting high, Radda said: “I may not know but of course, I’m not a financial expert to give this kind of analysis. But what I’m sure of is we have to be careful on the debt for the country and our states, because it may have some negative impact on the economy going forward. There is nothing wrong in borrowing to the develop but it’s wrong to borrow to spend uselessly.”
Benue State Governor-elect, Rev. Fr. Hyacinth Alia, however, commended the NGF for the induction events, saying it was an opportunity for them to learn about a lot of things.
He said: “I’m pleased to have been part to it for a number of reasons. One, for us, the incoming governors, is creating a new way for us to know where to follow, what to avoid and try to see how we can manage people’s expectations.
“You know, like myself, it’s quiet tall order. So when you hear colleagues, where their experience it’s a sort of an incentive for you to reposition yourself and create a new balance so that you don’t disappoint yourself or the people or the nation.”