Akpabio Sounds Alarm: Nigeria’s Unchecked Borrowing Trend Unsustainable

The President of the Senate, Sen. Godswill Akpabio, has expressed deep concern about the ongoing trajectory of Nigeria’s borrowing practices, emphasizing the need for a critical examination and control of the situation. This assertion was made during the commencement of a five-day interactive session focused on the 2024-2026 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), involving all revenue-generating agencies of the government.

In his address, the Senate President underscored the imperative of enhancing revenue generation as a pivotal strategy to address the current fiscal challenges. Recognizing the potential consequences of removing the Petroleum Subsidy on the Nigerian populace, Sen. Akpabio urged stakeholders to collaboratively formulate short-term measures to mitigate adverse effects.

Additionally, Sen. Sani Musa, Chairman of the Joint Finance Committee, emphasized the significance of the event as an opportunity for legislators to thoroughly review documents related to revenue generation and sources of revenues. He highlighted the dual nature of their responsibility in shaping the MTEF/FSP, characterizing it not only as a constitutional obligation but also as a moral imperative to guide and lead constituents in safeguarding their economic interests.

Sen. Musa stated, “Our role as legislators in shaping the MTEF/FSP is not only a constitutional obligation but a moral imperative to our constituents who look to us for guidance and leadership in safeguarding their economic interests.” He emphasized the need for unbiased deliberations focused on the welfare of the Nigerian people and called for collaboration and consensus-building to develop robust, equitable fiscal policies conducive to sustainable economic growth.

The escalating debt profile of Nigeria, a cause for growing concern, was spotlighted during the session. According to the Debt Management Office (DMO), Nigeria’s debt reached N87 trillion in Q2 2023, marking a substantial 75.2% increase compared to the first quarter. This surge was attributed to the inclusion of the N23 trillion obtained by the federal government through Ways and Means.

Breaking down the debt structure, the total debt stock comprises N33 trillion in external debt and N54.1 trillion in domestic debt. As the Federal government allocated N8.25 trillion for debt service in the 2024 budget, discussions during the interactive session inevitably revolved around strategies to manage, curtail, and optimize the use of borrowed funds.

The prevailing fiscal challenges necessitate a comprehensive and strategic approach to debt management, revenue generation, and economic sustainability. The collaborative efforts of the legislative and executive branches, along with relevant stakeholders, become imperative in steering the nation towards a path of fiscal responsibility and resilience.

The call for a reevaluation of Nigeria’s borrowing practices underscores the urgency to strike a balance between leveraging external funds for development and ensuring the nation’s long-term financial stability. As the nation grapples with economic uncertainties and the need for prudent fiscal policies, the interactive session serves as a platform for informed discussions and collective decision-making to chart a course that aligns with the best interests of the Nigerian people.