…Warns FG Against Adding to N24.3tn Debt Profile
From Omobola Odeyemi, Ibadan
An international investment expert, Dr. Vincent Nwani, has warned the Federal Government against adding more debt to the current N24.3 trillion debt profile, stressing that the debt is hampering Nigeria’s economic growth.
Nwani, who is a financial analyst, urged the government to take urgent action to reduce the alarming debt.
The business expert who spoke at the First City Monument Bank (FCMB) Plc , Southwest Region media parley tagged; ”Nigeria in 2019: Low Growth Versus Risking Risks”, said the national Gross Domestic Product (GDP) which is at 2.5 at the moment was too weak for development of the country.
He however noted that borrowing for developmental projects is wise but not feeling the effect of the borrowing on the masses is the concern of the economic experts in the country.
He noted the disinvestment implication of the GDP growth rate of Nigeria between 2014 and 2019 which reached its peak in 2014 at N568.50b but fell to N404.60 billion in 2017 and increase slightly at present to N397.30 billion.
The GDP annual growth rate currently stands at 2.01 per cent.
Dr. Nwani noted that the estimated GDP growth rate of 2019/2020 is likely to remain lacklustre, when the major risks to growth like power shortages, tight credit conditions and huge infrastructural deficit of $300 billion remain unsolved.
Dr. Nwani pointed out that tension in global trade, rising debt profile, power shortages, tight credit conditions, huge infrastructural deficit, security challenge and low infrastructural development have all contributed to the low growth rate of the economy.
According to him, Nigerian is filling the effect of the world currency crashes and the global trade growth which is pending at 0.5 per cent in the first quarter of the year.
He blamed sleepy economic performance of the country on the challenges of insecurity facing the country, poor policies of the government, and poor tax collection in Nigeria.
“In 2015, our external debt was N12. 1 trillion but before the end of 2018, it rose to N24.3 trillion. Though, I know it is never a crime to borrow money, but you must know what you are doing with the money you are borrowing.
“Today, no concrete project is going on in the country and we keep borrowing money. Today, our GDP is 2.5, which was above 6.0 few years ago. This is very weak for a country like Nigeria.
“You media practitioners need to challenge government on the new policy on loan for importation of food, especially milk. If you raise money to import without going through the CBN, when you get to port of entry, you will have problems”, he said.
On the closure of the Nigeria borders, he said the United States of American despite the security challenge being faced never closed its borders, urging Nigeria government to take action now.
The business consultant said the closure of borders by the Federal Government is a breach of Economic Community of West African States (ECOWAS) protocol.
He stressed the need for the country said the best way to close the border is to close the corruption in the borders.
“The closure of borders is a breach of ECOWAS protocol. It has legal and reciprocal consequences. The best way to close borders is to close the corruption in the borders” , he said.
He also called on the government to address power supply challenge and lower interest rate in order to make the economy competitive.
“Our economy is under all forms of invasions and it will still become worse. The only way we can be competitive is low interest rate and let there be light. We need light. We are vulnerable and our economy is large. 65 per cent are dependents”, he said.
He also decried the 2019 budget, saying it is equal to that of University of Texas.
“We are rich in term of potential but in the ability to generate revenue we are poor. The maximum we can do is to maintain the status quo. The business environment is not encouraging. In the ease of doing business, we are at number 146 out of 149 countries.
The economist decried low Foreign Direct Investments (FDIs) into the country, saying Ghana receives more FDIs than Nigeria.
Earlier, the Group Head, Southwest, FCMB, Mr. Diran Olojo had said the workshop was organized by the FCMB as part of its social corporate responsibility for southwest media practitioners for effective business reportage.
