The Lagos Chamber of Commerce and Industry (LCCI) has said that the use of 98 per cent of the federal government’s revenue for debt servicing is worrisome.
Making reference to the government’s use of 98 per cent revenue to service debt between January and May 2021, the chamber advised government to evolve innovative ways of using its idle assets to boost public revenue and foreign exchange inflows.
In a statement on Sunday, signed by the Director General, Dr. Chinyere Almona, it said that “Nigeria’s fiscal and financial challenges have been of concern to several stakeholders as the government has increasingly resorted to debt to finance recurrent and capital obligations in the face of dwindling revenue.
“The country’s debt situation has become worrisome with debt servicing consuming a significant share of the revenue. The debt service to revenue ratio for the period of January to May 2021 stood at about 98 per cent up from 83 per cent recorded in 2020 according to the budget implementation report.”
The chamber, however, clarified that its recommendations did not connote the sale of national assets, “but a mechanism to generate more revenue from the assets without their outright sales. This is a more sustainable way of revenue generation and boosting foreign exchange inflows.”
LCCI noted that Nigeria is an asset-rich nation as it owns hundreds of large state-owned companies, valuable parcels of land, and built structures in prime commercial locations that have been grossly under-utilised and contribute too little to the country’s fiscal and financial situation because their market values had not been ascertained.
It said there was, therefore, a need for government to take urgent steps to establish the market value of these assets, securitise the corporate assets and commercialise the real estate assets to raise revenue for the government and foreign exchange inflows for the country.
