Nigeria needs to earn higher revenue to manage its debt profile more efficiently.
The Director-General, Debt Management Office (DMO), Mrs Patience Oniha stated this in Abuja on Wednesday when she spoke with the News Agency of Nigeria (NAN).
While querying the country’s earnings, she said statistics had shown that relative to other countries, Nigeria’s revenue was low.
“The World Bank’s World Economic Outlook for 2020 showed that Nigeria with a revenue to GDP ratio of 6.3 per cent was ranked at 194 out of 196 countries covered,’’ she said.
According to her, a strong and comparable revenue base will reduce the need for relatively large amounts of new borrowing as Nigeria has witnessed, and will also reduce the debt service to revenue ratio.
Oniha urged the Nigerian media and other stakeholders to focus more attention on the urgent need to improve revenue.
“Revenue is the way to go and that is how countries develop and use borrowing to augment revenue shortfalls now and again. Nigeria has been running budget deficits for decades; it is about time to shift to balanced budget and even surplus budgets,’’ she stated.
She charged the government to take steps to address the recurrent issue of petroleum subsidy payment so as to further reduce borrowings and fix other structural issues such as insecurity, inflation, infrastructural deficit and foreign exchange shortages adversely affecting the business environment.
Oniha also told NAN that such steps would create an avenue for efficient tax collection and a wider tax base.
On its role in the debt acquisition and management processes, she said the DMO only plays an advisory role.
Oniha added that Nigerians attacking the DMO over debt management did not understand the legislations and regulations governing borrowing and public debt.
“It is strongly recommended that the public is familiar with the provisions in the DMO Establishment Act, 2003 and the Fiscal Responsibility Act, 2007.”
The cost of debt servicing has been of concern in recent times as the Federal Government spent more on debt servicing in the first four months of 2022 than the revenue it collected.
The debt servicing bill increased by 109 per cent between December 2021 and March 2022 rising from N429 billion to N896 billion.
According to data obtained from the DMO, this amounts to N3.83 trillion on debt servicing payments in 15 months.
