The Lagos Chamber of Commerce and Industry, LCCI, has raised serious concerns about the implications of Nigeria’s debt burden and feared that this may cripple efforts to really transform the economy.
The Chamber while reviewing the 2022 economy with a projection in 2023, reported that with the approved plan of the Federal Government to restructure its Ways and Means loans of N23 trillion, Nigeria’s total debt stood effectively at N67.7 trillion by end of 2022.
The LCCI, noted that at the end of the first half of 2022, Total Debt Service stood at ₦2.597 trillion, higher than the prorated sum of ₦1.978 trillion .by ₦619.81 billion (31.33 percent).
Also, the interest payments on Ways and Means collected from the Central Bank of Nigeria, CBN, amounted to ₦714.74 billion.
Citing data from the Budget Office of the Federation, the Chamber said that the sum of ₦1.333 trillion was used for domestic debt servicing, a difference of ₦52.34 billion (4.09 percent) from the prorated half year projection, while ₦549.70 billion was spent on external debt servicing during the period under review.
“Clearly, we must watch the cost implications of our borrowing and spending.” it warned.
To be able to revive the economy, the LCCI, said the Federal Government would need to sustain its targeted interventions in selected critical sectors like agriculture, manufacturing, export infrastructure, tackling insecurity, and free more money from subsidy payments.
“It is very imperative that we need sound monitoring and evaluation over the budget allocations to capital projects and defence spendings to respectively tackle infrastructural deficit and the fight against insurgency.
“We urge the government to tackle oil theft to earn more foreign exchange, borrow from cheaper sources to reduce the burden of debt servicing, and pave way for the removal of the fuel subsidy by the incoming government.
“With increased spending by the government for census and general elections, the government must block revenue leakages, reduce costs, and empower the private sector to create jobs and generate more revenue to the government” the Chamber advised.