By Tony Obiechina, Abuja
The Director General of the Debt Management Office, Ms Patience Oniha says the federal government has issued a total of N1.5 trillion promisory notes which was approved by the National Assembly.
Ms Oniha was speaking as a panelist on the the topic “Sustainable Approaches to Public Debt Financing,” at the just concluded Nigerian Economic Summit in Abuja.
She clarified that the public debt stock published by the DMO includes the 36 states and the FCT, adding that borrowing is governed through the Fiscal Responsibility Act.
“We can’t talk about debt alone, we must also talk about revenues, when you borrow and invest these monies wisely, it will enhance growth and development which is why we have issued promisory notes of N1.5 trillion approved and approved by the National Assembly”, she said.
She added that “To include any debt data in the Country’s debt stock, it has to be approved by National Assembly and Federal Executive Council.
The DMO DG however admitted that debt service to revenue is high and should not be in the level that is, while calling for diversified ways of growing revenue to invest in the future.
She said the Debt Management Strategy provides a framework on how to undertake the borrowings in the country.
Also in his contributions, Africa Tax lead at the PwC, Taiwo Oyedele believes that debt has never been Nigeria’s problem, while asserting that revenue challenges is what has brought Nigeria to the current economic challenges it is facing.
He said “Unsustainable debt burden is a symptom which is characterized by low revenue or high spending or a combination of both.
“As such, what is important for Nigeria is a national integrated revenue spending and debt management strategy because we need concerted efforts to grow out revenues.
“The revenue of the government and the entire 36 states is not up to the budget of new York, which is just a single state in the United States of America. Thus, if we want to optimize, we have to harmonize multiple taxation and multiplicity of collection agencies to ensure that revenue collection mechanisms are boosted,”
Oyedele also disagreed with some policies of the federal government that about 60 MDAs should generate revenue, saying it is impossible for that number of agencies to be involved in revenue collection, but rather advised that these agencies should concentrate on providing services, while calling for improvement in the collection of Personal Income Tax (PIT).
Also speaking, Funsho Akere, CEO, Stanbic IBTC Capital believes that Nigeria only has a revenue problem adding that “Government can’t change the quantum of debt stock, but it can focus on critical infrastructure that will drive growth and improve it’s revenue generation mechanisms,”
Earlier in his presentations, the chief economist of NESG,Dr. Segun Omisakin, attributed high overhead cost, over reliance on oil and gas commodities as the major drivers of debt.
He stated that the only way for inclusive growth is “Diversification of the economy and looking towards the non-oil sector which has huge revenue potentials,”
Dr. Omisakin also advised government to build a digital economy that is driven by innovations in key sectors of the economy like telecommunications, transport, agriculture among others.
