Lawan warns against more borrowings as debt exceed N44trn

Ahmad Lawan, Nigeria’s Senate President, has warned against increased borrowings by the Federal Government to fund development projects.

Lawan, at a brief ceremony to mark his 64th birthday in Abuja, said although borrowings cannot be completely eliminated, the government must do its utmost best to minimise its rising debt profile.

Suggesting ideas on how borrowing could be drastically reduced, he advised that the incoming members of the National Assembly must curtail the trend.

The Debt Management Office puts the nation’s total debt stock as of the third quarter (Q3) of last year at N44.06 trillion.

The DMO earlier in January disclosed that the incoming administration would inherit about N77 trillion as debt by the time President Muhammadu Buhari’s tenure ends in May.

On Tuesday, fortnight ago, Buhari signed the N21.83 trillion 2023 budget into law, with a deficit of N11.34 trillion.

The deficit represents 5.03 percent of the country’s gross domestic product (GDP).

Meanwhile, the country spent 80.6 percent of its revenue in the past eleven months on debt service.

Although data released by the DMO had put Nigeria’s public debt at N44.06 trillion as at the third quarter 2022, the federal government plans to borrow more to finance both the supplementary and 2023 budgets.

The Federal Government intends to approach the National Assembly for permission to borrow locally and internationally to fund the deficit.

However, Lawan suggested the need for government to make its Ministries, Departments and Agencies (MDAs) generate more revenue and also review “waivers and concessions already granted to corporate entities.”

He disclosed that the Senate would before its dissolution engage the MDAs on ways to improve their revenue generation duties.

Lawan said: “Definitely, we need to work hard on revenue generation and collection by the Ministries, Department and Agencies (MDAs) and other government agencies.

“I also believe that this is something that will spill to the next administration because it is not like we can fix it in the next few months.

“For those of my colleagues who will be returning to the National Assembly, this should be a very important matter for the next Assembly to continue to deal with because we just cannot afford to continue borrowing.

“We should minimize it. I know it is not possible to eliminate it completely, but we should minimise it.

“The next Assembly should do that. I don’t know how, but definitely, from our experience of today and even before today, we can do better in getting more revenues for government to deploy for development.

“For some of our colleagues who are going to Government Houses, the issue is very clear.

“We need the Federal Government as well as the states to work more closely because whatever the Federal Government does, if there is no participation or support or complementarity from the states, it won’t work.”

He added: “One other challenge is the lack of sufficient revenues for government to undertake its numerous laudable and noble national development projects across the country.

“Most of what we do in terms of national development is to borrow funds for us to execute those projects.

“I think we have to work hard to improve our revenue generation and collection because it is not looking too sustainable that we tolerate people and some agencies of government, to misapply or not even declare the revenues they collect. We can’t continue with that.”

“For us in the Senate, we have decided that for the remaining part, we will continue to engage with our revenue-generating agencies until we get better outcomes from them. This is possible and has become imperative.

“Also, the concessions and waiver that the government has given, we need to review that. Now every kobo counts because we are in a very difficult situation.

“Where a waiver cannot be justified anymore because of our present circumstance, then, such waiver should be reversed or renegotiated.

“But definitely, we need to work hard to improve the revenue generation and collection by the MDAs and other government agencies.”