Former Deputy Governor of the Central Bank of Nigeria, and an aspirant for the post of President in the previous presidential election has expressed his displeasure over the level at which Nigeria is operating in increasing public debt. The situation prevalent over the past six years, might not be a pointer to some good times ahead.
Moghalu revealed Nigeria to be debt-infused, dangerous and unencouraging. This is unconnected with the lackadaisical attitude of the President who has chosen to mortgage the future of the youths.
“We have to stop further borrowing and start to manage the current obligations in order to avoid a sovereign debt default or, at best, a costly restructuring. Further borrowing will lead to a disastrous debt bubble bust”, he warned in a statement.
He proceeded in his blunt perspectives by pointing the gulf of difference that had occurred between the $10.31 billion owed as debt in 2015 and the $32.85 billion owed as at March, 2021.
The Professor reiterated that the total outstanding public debt stock shifted upwards by 173 percent in the same period, from N12.11trillion to N33.10trillion.
Noting that on the average, over N3.6trillion is being added to the public debt annually, the expert observed infrastructure investment used to justify it have grossly under-performed.
He insisted public-private partnerships should be the dominant approach to infrastructure development in Nigeria, not contract awards that, from information available on projects in Ghana and Ethiopia, are “overvalued”.
The economist regretted that in the real situation of the incompetence of the government since 2015, businesses have been groaning and FDI inflows have decreased.
Moghalu said instead of making economic growth happen, the economy has twice gone into recession, and when out of it, growth has been underwhelming at 2 percent.
His statement lamented how the national unemployment rate increased to 33.1 percent while youth unemployment has reached 42.5 percent in a few years.
Moghalu urged the government to focus on increasing domestic revenue, by expanding the tax base – not by increasing rates as has been done with the value-added tax (VAT) – and by introducing reforms for ease of paying taxes while abolishing multiple taxations.