Mr Momoh Aliyu, a financial expert says Nigeria’s infrastructure deficit requires borrowing to meet the desired revenue generation to propel accelerated development.
Aliyu said this while speaking with the News Agency of Nigeria (NAN) in Abuja on Wednesday.
Reacting on the rising debt profile of the country, he said Nigeria had a huge deficit in its infrastructure development and something must be done to fill the gap.
He explained that if getting loans were for infrastructure development, there was nothing wrong, adding that such step was a saving grace because Nigeria was at cross road and needed to seek solutions.
According to him, the infrastructure deficit has led to revenue deficit in budgeting, hence the need for external loan to meet up with the infrastructure.
“It is quite unfortunate how Nigerians are being misled by some mischievous past public office holders on this matter. Nigeria’s debt stood at 63 billion dollars as at 2015, and currently stands at 83 billion dollars.
“With the new request of about 29 billion dollars, this means the country’s loan profile will be well over 100 billion dollars in 2020 if the loan is approved.
“The Nigeria Debt to GDP is less 30 per cent which is still within the threshold and portends not too much of a problem but of course risky.
“The risky factor is due to sustainability of the debt profile because of downward trend in our internal revenue generation.
“For the past five years, the Federal Government has been having a deficit budget financed by external borrowing. The lack of proper internal revenue generation is risky to financing the debt,” he said.
Aliyu who is also a Managing Director of Cyber1 Systems Network International noted that the challenge for the country had been loan monitoring, saying that most loans were not expended on intended purposes.
He said the 1999 Constitution as amended bestowed an audit oversight function on Public Accounts Committee (PAC) of the National Assembly.
According to him, unfortunately, this function has not been effectively carried out, hence the need for a vibrant PAC to address the issue of utilisation.
“Loan is a trend in every part of the world, the issue is what is your loan used for? Do you have a loan monitoring mechanism. Is your legislature reviewing the loan utilisation and performance? these are the challenges.”