From Juliana Taiwo-Obalonye, Abuja
Director General of the World Trade Organisation (WTO), Dr. Ngozi Okonjo-Iweala, has urged governors to watch their debt profiles, and keep careful control of expenditures, even as they invest in infrastructure, education, and basic health systems.
She also expressed concerns over the mass exodus of Nigerian youths in search of greener pastures abroad, termed ‘Japa’ saying in four years no fewer than 50,000 Nigerians have relocated to Canada.
She stated this at the opening of the 2023 induction ceremony for newly elected and re-elected governors with the theme, “Governing for impact: building sub-national governance” organised by the Nigerian Governors Forum (NGF).
“Excellencies, please watch your debt profiles, and keep careful control of expenditures, even as you invest in infrastructure, education, and basic health systems. Please endeavour to pay teachers, health workers, and others their salaries, and retirees their pensions,” she said.
The Debt Management Office (DMO) in its Fourth Quarter report of 2022 had said Nigeria’s total debt hovers around N46.25 trillion, with total domestic debt stock estimated at N27.55 trillion, while external debt stock stood at N18.70 trillion ($41.69 billion) as of December 2022. DMO blamed decades of operating budget deficits by successive governments as responsible for Nigeria’s high debt profile.
Okonjo-Iweala, former Minister of Finance under the President Olusegun Obasanjo’s administration and former Coordinating Minister of the Economy and Minister of Finance, under the Goodluck Jonathan’s administration, urged state governments to publish federation revenue allocation and Internally Generated Revenue (IGR) that accrue to them to earn citizens’ trust, keep them abreast of their finances and show transparency in their accounts.
She said: “We have challenges on the fiscal, debt, and monetary policy fronts. Nigeria’s gross debt level has climbed from N19.3 trillion in 2015 to $N91.6 trillion in 2023. The debt-to-GDP ratio has almost doubled from 20 per cent to 39 per cent over that time period. While the debt-to-GDP ratio may not look so alarming, as revenues decline, the burden of debt servicing has increased dramatically. The debt service to revenue ratio is certainly alarming, at 83.2 per cent in 2021 and 96.3 per cent in 2022, according to the World Bank. This means that at the federal level, after servicing our debt there is little room to pay for recurrent expenditures, let alone investment.
“The fiscal deficit of 5.3 per cent of GDP is higher than our agreed fiscal rule of three per cent of GDP: this has to be carefully monitored and brought down. Dealing with the fiscal deficit will of course be infinitely more difficult with an oil subsidy bill of N3.36 trillion for the first half of 2023 (or N6.72 trillion if it is not removed). The deficit is made worse by revenue losses from oil theft. The difficulties around this issue underscore the importance of political consensus – whether you are in government or in the opposition – on policies critical for nation-building.”
She said the world was at the dawn of a new wave of services trade and that using new remote work and AI tools, it has become increasingly easy for businesses sitting in Abuja, Ibadan or Port Harcourt to provide intermediate services like accounting or insurance claims processing to offices around the world.
“With our large numbers of educated people fluent in English – together with a deep network of connections to the diaspora – we are well positioned to seize these opportunities. But such businesses, like our tech startups, will struggle to thrive if we keep losing so many of our most skilled young people to emigration. Let me share some numbers. Over 15,000 Nigerians emigrated to Canada in 2021, joining 19,000 who had moved there in the previous two years. Estimates for 2022 are 20,000. That is over 50,000 skilled Nigerians in the space of four years.
“In the first half of 2022 alone, the UK granted skilled worker visas to nearly 16,000 Nigerians. Thousands of Nigerian-trained medical doctors work in the USA. The most popular phrase in Nigeria now is ‘I am going to Japa.’ I am not telling people not to go, but what I am saying is how many of these Japas can we afford? If you japa we want you to Kaka (return).”