The Manufacturers Association of Nigeria (MAN) said it is concerned about the debt servicing capacity of the federal government if the National Assembly approves the planned $30 billion loan.
The Director General, Segun Ajayi-Kadri told Daily Trust at the weekend that the rising debt profile of Nigeria is a source of concern, “especially the capacity of government to effectively service it and at the same time, meet the bursting needs and aspiration of the citizenry going forward.
“Already, our budget projections for 2020 anticipate a ₦2.45 trillion debt service, higher than the ₦2.14trn earmarked for capital expenditure,” he noted.
He said total external debt stands at $27.16 billion, while domestic debt has climbed to $56.72bn. Nigeria’s debt stock increased by 3.11% from $81.27bn in the first quarter of 2019 to $83.88bn (N25.70trn) in June 2019.
“This is almost 13% increase year-on-year from the $73.21bn in June 2018. And even though our debt-to-Gross Domestic Product (GDP) ratio, which stands at 28 percent, is still below the average in Africa, our revenue-to-GDP ratio remains low,” he said.
President Muhammadu Buhari last week returned to the National Assembly to re-present the federal government’s request for a $29.96bn fresh foreign loan.
The proposal was part of the external borrowing plan for 2016-2018 rejected by the eighth National Assembly.
The MAN official said the loan was predicated on the need to use the facility to actualise projects in the power, agriculture, transport and mining sectors of the Nigerian economy.
“My assumption is that the Federal Government would have provided the needed details, the absence of which, according to the 8th Senate, necessitated its rejection in the first try,” he said.
