Security and Exchange Commission (SEC) has warned that the increasing debt service may have debilitating consequences on Nigeria’s economy.
The commission’s Head, Economic Research and Policy Management Division, Office of the Chief Economist, Afolabi Olowookere said the total public debt has increased from N5.24tn in 2010 to over N32tn in 2020, adding that the situation may be manageable at around 20 per cent of Gross Domestic Product.
But said rising debt service is a threat, even as shocks to commodities price are already affecting revenue and low tax to GDP ratio.
“Moving towards improved sustainability may require future debt tied to revenue-generating projects,” he advocated.
He noted that Nigeria’s budget had more than doubled in the last 10 years, while the deficit had increased several folds.
“But capital expenditure and infrastructure estimates have not increased much. Implying deficit is often incurred to finance short-term consumption (unproductive) items,” he explained.
