Home Business Nigeria’s rising debt signals danger for its economy – NECA

Nigeria’s rising debt signals danger for its economy – NECA

The Director-General of Nigeria Employers’ Consultative Association (NECA) Mr. Timothy Olawale, has said that the country’s mounting debt burden is worrisome and could have negative effects on the development of the economy.

Speaking in Lagos on Tuesday, Olawale expressed fears that about 25 per cent of the 2019 budget of N8.8trn, N2.140trn will be used to service debts.

He stressed that since the loans were gotten from the domestic market, the Federal Government will continue to limit the real sector from accessing fund for growth and expansion.

“The real sector should be able to access funds which should ultimately lead to increased employment opportunities within the economy.

ALSO, READ: Nigeria’s Economy Grows By 1.81% in 3rd Quarter – NBS

“Latest figures released by the Debt Management Office showed that government’s domestic debt profile rose to N15.814trn in September 2018 from N15.629 trillion in June 2018 (1.19% increase),” Olawale maintained.

He said that the amount proposed for debt serving in the 2019 budget could have a negative effect on the developmental capacity in spite of government’s financial managers’ argument that the rate of increase was within a manageable limit.

Olawale cautioned that while the effect of the increasing debt might not be immediate in totality, it could be catastrophic in the long term with a chunk of revenue consumed by debt servicing to the detriment of infrastructure development.

He urged the Federal and State governments to take steps aimed at cutting the cost of governance and recurrent expenditure.

Source: News Agency of Nigeria

Check Also

How Google’s Gemini is Pioneering the Future of Generative AI

In a groundbreaking move, Google unveiled its new generative AI model, Gemini, on Wednesda…