Follow Us on Google
From Juliana Taiwo-Obalonye, Abuja
President of the African Development Bank (AfDB), Akinwumi Adesina, has urged the Federal Government to “decisively” resolve its debt challenges to ignite economic growth.
He expressed concern over the country’s debt service to revenue ratio, saying it was too high.
The Debt Management Office (DMO), had in September said Nigeria’s total public debt (federal and state governments) rose to N35.46 trillion at the end of the second quarter of 2021.
Adesina , however, acknowledged that the debt-to-GDP ratio remains “moderate.”
According to him, economic resurgence is only possible when government removes “structural bottlenecks” that limit the revenue-earning potential of non-oil sectors.
“Nigeria must decisively tackle its debt challenges. The issue is not about the debt-to-GDP ratio, as Nigeria’s debt-to-GDP ratio at 35% is still moderate. The big issue is how to service the debt and what that means for resources for domestic investments needed to spur faster economic growth.
“The debt service to revenue ratio of Nigeria is high at 73%. Things will improve as oil prices recover, but the situation has revealed the vulnerability of Nigeria’s economy. To have an economic resurgence, we need to fix the structure of the economy and address some fundamentals.
“Nigeria’s challenge is revenue concentration, as the oil sector accounts for 75.4 % of export revenue and 50 % of all government revenue.
“What is needed for sustained growth and economic resurgence is to remove the structural bottlenecks that limit the productivity and the revenue earning potential of the huge non-oil sectors.”
He also advised government to borrow a leaf from other African countries like Morocco and consider total transformation of the nation’s seaports instead of struggling to decongest the crowded ports.
He declared that Nigeria in 2021 should not be wasting time seeking how to decongest its seaports but how to transform their operations.
The former minister said he was impressed with the smooth and flawless operations he witnessed when he undertook a tour of Tangiers Seaport in Morocco, pointing out that the North African nation is using technology to drive her Seaports.
“When I first arrived at Tangiers Seaport I thought they were on national holiday but I later discovered that machines, technology have taken the work of humans. Nigeria should learn from Morocco. We (Nigeria) should not be decongesting the Seaports, we should be transforming the Seaports.”
