Nigeria’s former vice president, Atiku Abubakar has said that the country is on the verge of economic ruin with the rate at which President Muhammadu Buhari-led federal government is spending to service the nation’s debt.
He said the alarm had become imperative to alert Nigerians on the impending crisis that may envelop the country with the continuous borrowing of the All Progressives Congress (APC) government.
Atiku, who contested against Buhari during the 2019 presidential election as the Peoples Democratic Party’s presidential flagbearer, said if the country revenue-generating power does not increase, it would be unbearable to keep servicing the nation’s debt.
In an article titled ‘Nigeria In Financial Crisis: Robbing Our Children to Pay for Our Greed’ which was released on Tuesday through his social media page, the former VP frowned at the country’s First Quarter 2020 financial reports in the Medium Term Expenditure Framework and Fiscal Strategy from the Federal Ministry of Finance, Budget, and National Planning.
The report had shown that Nigeria spent a total sum of ₦943.12 billion in debt servicing during the time under review while the government’s retained revenue for the same period was ₦950.56 billion.
Atiku while bemoaning the development, expressed shock that the nations’ debt to revenue ratio is now 99%, adding that the government must show leadership by putting up measures to save the country from looming economic challenges.
“No one should be deceived. This is a crisis! Debt servicing does not equate to debt repayment. The reality is that Nigeria is paying only the minimum payment to cover our interest charges. The principal remains untouched and is possibly growing.
“We are at a precipice. If our revenue figures do not go up and go up quickly, Nigeria risks a situation where our revenue cannot even sustain our debt servicing obligations. Meaning that we may become insolvent, and our creditors may foreclose on us, as has occurred in Sri Lanka and the Maldives,” he argued.
The PDP stalwart regretted that despite his numerous counsel to FG to desist from indiscriminate lending, and reduced Nigeria’s budget by at least 25%, to reflect the economic realities of the present situation, said the increase in the nation’s debt to GDP ratio and debt to revenue ratio showed the Buhari government has lost touch with realities.
He urged the apex government to take immediate steps to drastically reduce its expenditure, especially on wasteful projects, such as maintenance of the Presidential Air Fleet, the ₦4.6billion Presidential villa maintenance budget, among others.
“Not only have we squandered our opportunities, but we have also squandered the opportunities of our future generations by bequeathing them a debt that they neither incurred nor enjoyed.
“We cannot be on the verge of economic ruin, while still maintaining a Presidential Air Fleet that has more planes than the Presidential fleets of those from whom we take these loans. Nigeria must sell those planes and channel the revenue to other vital areas of need while taking additional steps to reduce the cost of running our government.
“The Federal Government cannot continue to justify these unsustainable numbers by pointing at Nigeria’s debt to GDP ratio. That is only half the picture. Our debt to revenue ratio paints a much more realistic portrait of our financial situation, especially as our revenues are majorly tied to a mono-product, oil, and gas, which are very vulnerable to global shocks.
“Again, I warn that Nigeria is facing a crisis, and we cannot continue to keep up appearances by taking out more loans to prop up our economy. That will amount not just to robbing Peter to pay Paul, but to robbing our children to pay for our greed!” he said.