Debt
By Cecilia Ologunagba
Abuja, March 25, 2018 (NAN) An economist, Dr Aminu Usman has advised the Federal and States Governments to prioritise domestic debt repayment to boost the economy.
Usman, the Head of Economics Department, Kaduna State University, gave the advice in an interview with the News Agency of Nigeria (NAN) on Sunday in Abuja.
He said focusing on payment of domestic debt would help to ease cash flow.
“I will advise government to prioritise domestic debt repayment, especially for local contractors so that local economy can deflate to ease cash flow.
“Government should avoid frivolous budget with huge debt content which eats up significant percentage of the budget in repayment.
“New sources of revenue and funding the budget must be sourced and prioritised,’’ the don said.
The value of foreign debt is presently put at 19.9 billion dollars, while domestic debt is N3.35 trillion at the end of 2017, according to the National Bureau of Statistics (NBS).
Usman said domestic debt could be disturbing considering its crowding effect on the private sector.
He said government was actually squeezing the private sector from getting funding for investment and expansions, thereby making job and wealth creation difficult.
Usman also cautioned the government on excessive borrowing so as not to overburden the economy.
According to him, the stock of debt comprised that of the federal and many states.
He, however, said the growth in the stock of foreign debt was disturbing, considering the effort made in recent past to exit debt.
“Debt in itself may not be bad but its utilisation, especially the corrupt attitude. By utilisation, I mean what the debt is meant for and the source of repayment of the debt.
“If debt to be repaid from fiscal operations of government will hurt or burden future generations, it is not a good one.
“If the debt is tied to repayment from project funded, it may not over burden the country in future.
“In any way, I believe government should be more cautious in contracting further debt to prevent the kind of debt quick mire we found ourselves in the past,’’ the don said. (NAN)
CIA/EEE
=======
Editing by Ese E. Ekama