Civil Society Legislative Advocacy Centre (CISLAC), yesterday, said it was concerned about the lack of vigorous scrutiny and attention by lawmakers in granting requests for loans without reflecting the provisions of the Fiscal Responsibility Act and the greater implication for the nation’s economic state.
Executive director, CISLAC, Auwal Rafsanjani, said this at a news conference organised in collaboration with Christian Aid Nigeria, on the Increasing Role of Private Creditors in Nigeria’s Debt Crisis and its Human Costs.
He said the Nigerian legislators had the constitutional and legislative mandate to approve loan requests based on public interest and should put this clause as a prerequisite to any approvals they might want to give.
He said a major contributor to Africa’s rising public debt is the unprecedented influx of private lenders flooding developing economies looking for higher returns outside advanced economies.
“This is sequel to the global financial crisis of 2008,” he added.
He said Nigeria’s debt is growing and increasingly putting the country in a precarious situation, adding that it has significant implications for human rights.
It is instructive to recall that Nigeria’s debt service cost presently outweighs its revenue with clear signs of economic dangers ahead.
Mr Rafsanjani said the situation also had implications on education, health, climate change, mitigation, and adaptation, and these call for a collective action to address the debt crisis.
He said the past decade has seen the largest, fattest and most broad-based increase in debt in emerging and developing countries over the past 50 years.
He said the total debt in these areas has risen by 54% of Gross Domestic Product (GDP) to a holistic peak of almost 170% of GDP in 2028.
“According to the Debt Management Office (DMO), Nigeria’s total public debt stock as of June 30, 2022, was N42.84 trillion.
“It is instructive to recall that Nigeria’s debt service cost presently outweighs its revenue with clear signs of economic dangers ahead,” he said.
Mr Rafsanjani said with the refusal of private creditors to embrace debt relief initiatives; the Nigerian government will continue to spend a significant part of its budget to service loans.
He said this would come under stringent conditions, including high interest rates, and drastically reduce due commitment to more critical socio-economic sectors like health and education.
Mr Rafsanjani said in the Nigerian context, about 90% of the revenue is devoted to debt serving at the expense of development projects. (NAN)
