FG explains Nigeria’s N30tr debt profile
.We’re spending about N1.3tr on capital – Osinbajo
.Says NASS responsible for 2018 budget delay
As Nigeria’s debt profile is said to have skyrocketed from about N9 trillion, inherited by the current administration to the reported N30 trillion, the Federal Government, through the Vice President Yemi Osinbajo, has explained that the government is very prudent, and condemns impunity.
The Federal Government noted that this is the first time in the history of Nigeria that about N1.3 trn is spent on capital, which means that the current administration is investing in the right place.
The Vice President made this disclosure in a document released by the Senior Special Assistant on Media and Publicity, Office of the Vice President, Laolu Akande.
He said that this is a government that spends resources judiciously as against the previous practice.
But some concerned Nigerians have lately expressed discomfort at the huge debt profile of the government, calling for caution.
For example, Pastor Tunde Bakare of the Latter Rain Assembly, Lagos, recently warned Federal Government to guide against incurring loans, adding that it would mortgage the future generations of Nigerians.
But the Vice President said: “We are not just borrowing money anyhow; no, we are investing in the right place.
“Every government or most governments anywhere probably look for some points to borrow, but the important thing is what are you borrowing for? And that’s why we are building the Lagos-Kano rail, doing the Lagos-Calabar rail, the second Niger Bridge and the Mambilla hydro project that has been abandoned for almost 40 years.
“We are improving capacities in power, we are investing in social investment, and we are investing long-term in the things that will create an economy that can support a large number of young graduates, who are coming in the market every day. That’s a process that needs a lot of thinking; that needs a lot of investment”.
He added: “I think the most important thing is to ask that when there was a N9 trillion debt, where is the infrastructure to account for that? I think that is the most important question to ask. It’s not whether you borrow, but what you spend that money on.
“I think we should be able to prove that the earning is 60 per cent less than the earning in the past five six years. So we are spending far more on the right things and we are able to ensure that we build a future that young people can truly look forward to”.
Commenting on the 2018 budget delay, the Vice President, said: “We have a democracy that has, as you know, three arms. The two relevant arms for budget are the executive and legislature. If you recall when I was Acting President, I signed the 2017 budget and, at that time, I made the announcement with the full consensus of the National Assembly that, from 2018, we are going to have a budget that is going to apply in January and end in December the normal financial year.
“We agreed that we will submit our proposal in good time, and we did that first week of November. The President did so. We fulfilled that part of the agreement. The budget is with the National Assembly. There is very little we can do to control that. That’s the system that we have”.
He, however, debunked the report that 50 per cent Nigeria’s revenue is reportedly being spent on settling debts.
He said: “No, we are not spending 50 per cent of our revenue servicing debt. Let me explain that: we have a deficit somehow in the region of about N2.6 trillion now, a lot of our revenue has to be spent on capital and recurrent, and recurrent is 70 per cent of revenue.
“But for the first time, we are spending 30 per cent on capital. Before now when oil was a $115 a barrel, we were spending 11 per cent or 15 per cent on capital, and capital is the most important expenditure because that is where you do the infrastructure in order to be able to build the economy. So, the reality is what we are spending is to provide the infrastructure that will last”.
