SIR: It is not by any standard a palatable news report that the Federal Government made a total of N3.25 trillion in 2020 and out of which it spent a total of N2.34 trillion on debt servicing within the year. This means that 72 per cent of the government’s revenue was spent on debt servicing. It also puts the government’s debt servicing to revenue ratio at 72 per cent.
According to the report, a review of the budget performance of the 2020 Appropriation Act in 2019 shows that the Federal Government made total revenue of N3.86 trillion. Within the year, debt servicing gulped N2.11trillion. This puts the Federal Government’s debt servicing to revenue ratio in 2019 at 54.66 per cent. This means that between 2019 and 2020, the Federal Government’s debt servicing to revenue ratio jumped from 54.66 per cent to 72 per cent. The report concluded.
Must the nation borrow in ways that mortgage the future of our nation? Have we as a nation forgotten that development is said to be sustainable ‘when it is achieved without excess socioeconomic environment degradation, but in a way that both protects the rights and opportunities of coming generations and contributes to compatible approaches?
As the nation goes on borrowing spree and speeds on ‘borrowing lane’ in the name of infrastructural development, one may be tempted to ask; if we have forgotten that already, going by World Bank’s revelation that “almost half of the poor people in sub-Saharan Africa live in just five countries: and they are in this order, namely; Nigeria, the Democratic Republic of Congo, Tanzania, Ethiopia and Madagascar?
Can’t President Muhammadu Buhari led Federal Government appreciate the time-honoured aphorism which says that; no nation becomes strong/great by living on borrowed funds?
More works need to be done, more reforms to be made in the country. As a nation, we are poor not because of our geographical location or due to absence of mineral/natural resources but because our leaders fail to take decisions that engineer prosperity. And we cannot solve our socio-economic challenges with the same thinking we used when we created it.
Finally, within this period of economic vulnerability, a new awareness that must not be allowed to go with political winds is the expert warning that; ‘‘Accumulated debt can hinder a country’s development, especially when most of the revenue generated is used to service debt…when huge amount is used to service debt, there is no way capital development can happen and this affects the people and the country generally.”
• Jerome-Mario Utomi is e-programme coordinator (Media and Public Policy), Social and Economic Justice Advocacy (SEJA), Lagos.