Professor Kingsley Moghalu, a former deputy governor of the Central Bank of Nigeria, has criticised Nigeria’s present borrowing situation and asserted that no financial institution will provide the nation with debt relief.
Additionally, Moghalu stated that the country’s next leader would take extraordinary measures to ensure that the nation had a sound fiscal policy.
Remember that the 2022 fiscal performance report numbers for January through April showed that Nigeria’s overall income amounted at N1.63 trillion while debt servicing stood at N1.94 trillion, suggesting a discrepancy of almost N300 billion. Zainab Ahmed, the minister of budget, stated this last week.
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The political economist responded on Twitter on Monday, July 25, claiming that Nigeria’s argument is weak since the government has been negligent.
Moghalu said;
When some of us were warning that we’re heading into a debt crisis, some official jokers in high places in this country told us “No: our debt to GDP ratio is still manageable” Now that we have earned N1.6 trillion in Q1 of 2022 and spent N1.9 trillion to service debt, effectively borrowing over N300 billion to pay our debt, the jury is in.
We have fallen off the debt cliff. The next government in Nigeria, whoever leads it, will have to pull a rabbit out a hat to keep our fiscal boat afloat. Asset sales and debt restructuring will likely be inevitable.
Unlike in the OBJ era, no one will give us debt relief. Our case is weak because we have been irresponsible. Simple. The issue for us as a developing country was always the ratio of debt to our revenues. Now it’s at 120%. Welcome to Nigeria.
Anyone quoting the debt figures of the US and Japan – seriously productive economies – in relation to Nigeria’s debt crisis deserves to be flogged in the public square.”
When some of us were warning that we’re heading into a debt crisis, some official jokers in high places in this country told us “No: our debt to GDP ratio is still manageable” Now that we have earned N1.6 trillion in Q1 of 2022 and spent N1.9 trillion to service debt, effectively
— Kingsley Moghalu (@MoghaluKingsley) July 25, 2022
