Nigeria’s debt profile keeps galloping and taking the upward trend according to datas from the debt management office (DMO) but it is unfortunate that there’s nothing to show for it. When you think about it and analyze how much Nigeria has borrowed and who and whom Nigeria is owing you will wonder where the money has been entering and what the money was spent on. As of december, 2021, Nigeria’s public debt profile is said to have hit N38 Trillion.
It was also reported that as of 31 March 2021, Nigeria’s external debt stock was about US$32.9 billion. Inside this total figure Nigeria is owing, debt to multilateral institutions such as the World Bank accounted for 54.3%, commercial debt accounted for (33%), bilateral debt accounted for (12.7%) and promissory notes which accounted for (0.55%).
The United States, World Bank, the UK, France, Switzerland, Japan, China etc are some of the countries Nigeria has borrowed from and currently owes. Latest data from the Debt Management Office reveals that Nigeria is owing China alone about $4.1 billion as of September 2021.
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It should be on record that borrowing is not bad; borrowing is good and it’s advisable. Best investment and business experts advise that you should take a loan to fund some projects. It’s okay to borrow but what is not okay is to borrow for recurrent expenditures.
When an investor or a business man borrows, he is expected to plough that loan into some long or short term capital investments that would generate money subsequently so he can be able to repay back the loan. It becomes foolish when the so-called investor or business man uses the loan he got for recurrent expenditures like throwing parties, buying new cars or even paying salaries of workers.
Mr. Peter Obi, the former chief executive officer of Anambra state and former chairman of a top tier bank in Nigeria has been emphasizing on the point that the Nigerian government should stop borrowing for recurrent expenditures. In his words, what develops a nation is education, health and things that can pull people out of poverty, so Nigeria should either borrow to invest in those or they shouldn’t borrow at all.
The borrowed funds are always looted by the kleptomaniacs is a hackneyed phrase. Nobody can account where and what the 32.9 billion dollars Nigeria is currently owing was spent on. Nobody can show what sector it was invested into.
Subsequent borrowing should be put into long term expenditures; the government should invest in education with the borrowed funds, the government should invest in small and medium enterprises (SMES) to pull people out of poverty, the government should invest in security in other to attract foreign investors that will drive the foreign reserve upwards, invest in road networks; road networks that would link the rural and the urban areas in order to help peasant farmers and rural traders.