At N21.7 trillion and still counting in debt level, Nigeria’s finance minister, Kemi Adeosun, has said the country’s public debt level is under control and sustainable.
Adeosun, in spite of the warning by the International Monetary Fund (IMF) that debt levels in African economies were rising, said she owes no one an apology because the country had to borrow to exit economic hardship on its citizens.
The finance minister while speaking to newsmen on the sideline of the G20 Finance Ministers and Central Bank Governors meetings at the ongoing 2018 IMF and World Bank meetings in Washington DC, said Nigeria had nothing to worry about.
Nigeria is a middle-income country
Kemi Adeosun said the country is not part of the low-income country that debt levels can affect.
“It is correct that debt levels in low-income countries is a threat but Nigeria is better described as a middle-income country.
“The concern that has been expressed, and it’s a legitimate one, is that debt levels in those countries are at 55% of GDP which is very high but Nigeria’s is at less than 20.
“So we are not one of the countries they have expressed concerns about. However we will continue to manage our debt very very responsibly.
“We are at 20% of GDP and we do not intend to grow it aggressively. We are doing well at the moment as debt rate to revenue is going down gradually as we replace debt with revenue and refinancing our debt,” she said.
Nigeria government is monitoring debt levels at every stage
Adeosun said the government would keep monitoring and analysing its debt levels at every stage so that they don’t fall into the trap that most African States had fallen into.
The Minister reminded Nigerians that due to the recession and near collapse of major sources of income, which it had inherited, from the former administration, the government had no choice but to borrow in order to save the country.
The options Nigeria had
Minister Kemi Adeosun said the country decided to take on more debt and invest in infrastructure so that growth can keep going.
“There were two options. One was austerity, cut back, lay people off, and wait for the oil prices to rebound.
“The other was to be more aggressive by expanding the budget, take on more debt and invest in infrastructure in the hope that you will get growth going and then you will be able to develop more revenues.
“Step one, two and three of that has been done. We expanded our budget, we pumped money into the economy, we made sure that recession was not prolonged and we are now back into growth.
“What we need to do now is to accelerate that growth and focus on revenue mobilisation which in turn will reduce our debt pressures.
“Some of the ministers that I was in the meeting with are still in recession. And that means real pain for a long time. In Nigeria, to shorten it, we had to borrow in order to do so and I make no apologies for that, that was the right thing to do,” she said.
IMF on rising debt levels
On Thursday, April 19, 2018, Christine Lagarde, the IMF Managing Director, opined that Global debt stood at 164 trillion dollars which were 25% of global GDP.
She said the rising debt levels presented a risk to low-income countries.
Lagarde said such countries may face hardship and be unable to repay these debts if they do not look for alternative measures to borrowing.
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