The Civil Society Legislative Advocacy Centre (CISLAC) has urged the National Assembly to address Nigeria's revenue shortfalls earnestly, warning that the current indicators of foreign and domestic debts pose significant risks for the nation.
During a press briefing with the Senate Press Corps on Friday, the Executive Director of CISLAC, Auwal Rafsanjani, expressed his concerns about the growing debt overhang, which he said has led to an economic crisis for the nation.
Rafsanjani highlighted that a substantial part of the foreign debt is owed by private creditors, with a loan repayment percentage standing between 6 to 9 percent and a shorter repayment period. He said, “These revenue shortfalls have created budget deficits that have precipitated our debt crisis and has grown our external debt by 1, 333% from the level it was after the Paris Debt buy-back-deal in 2005/06."
As of June 2023, Nigeria's total debt portfolio stood at N87.9 trillion ($114.3 billion) and is projected to climb to N107.38 trillion in 2024, following recent approvals by the National Assembly. Rafsanjani expressed concern that 37% of Nigeria’s total external debt figure is owed to private creditors, whose loans attract higher interest rates and have shorter repayment periods compared to loans from multilateral and bilateral sources.
He warned, “The result is that debt servicing will cost 98% of our budget, and the government will spend six times more on servicing debts than on building new schools and hospitals in 2024. This unsustainable level of public debt highlights the need for a reassessment of government spending and revenue generation."
Rafsanjani, speaking on behalf of the Tax Justice and Governance Platform (TJGP), called for sound economic reforms and balancing that would pave the way for significant investment in critical sectors that impact vulnerable citizens.
CISLAC urged the legislators to urgently investigate the movement and spending of loans received by the past administration of President Muhammadu Buhari. Rafsanjani said, “We thus request that as a matter of urgency, the National Assembly should commit to investigating the movement and spending of loans received by the Federal Government in the past and present administrations, including but not limited to the $3.4 billion loan obtained from the International Monetary Fund (IMF) as reported in the 2020 annual audited report published by the Auditor-General of the Federation."
He further called for the revision of legal and institutional frameworks related to debt management, emphasising transparency and accountability. This includes accelerating the amendment of the Fiscal Responsibility Act (FRA) 2007. Rafsanjani stressed the need to redefine the purpose of incurring debts in clear terms, ensuring that debts are for projects that will promote value chain development, improve the macroeconomic framework, develop infrastructure, and build strategic human capital.