Nigeria’s President-elect, Bola Tinubu, will inherit a ₦46.25 trillion debt incurred by past administrations including the President Muhammadu Buhari led-government.
This is one of the first issues the incoming government will tackle as they come into power on May 29, 2023.
When President Buhari begged Nigerians for forgiveness, many said much damage has been done to the nation’s economy.
Now, the incoming administration will face the challenge of repaying these heavy debts.
The ₦46.25 trillion debt excludes the ₦369 billion loan approval the present government claim it received from the World Bank to cushion the effect of fuel subsidy removal scheduled for implementation in June 2023.
The Eight Years Of Buhari
According to the Debt Management Office (DMO), Nigeria’s total debt stock has hit ₦46 trillion in the eight years of the Buhari administration.
The DMO reveals that Nigeria’s debt profile had grown from ₦12.6 trillion in 2015 to over ₦46 trillion in 2023.
The situation has continued to raise fiscal worries, especially as the International Monetary Fund, IMF, says Nigeria almost emptied its treasury on debt servicing in 2022.
Recently, the Federal Inland Revenue said it collected ₦10 trillion in revenue in 2022, with a 2023 budget expenditure of ₦21.83 trillion pegged on deficits of ₦11.34 trillion.
The issue of debt sustainability and economic instability currently choke Nigeria without hope.
Renewed Hope
However, May 29, 2023 will mark the beginning of a renewed hope for Nigeria.
The task of surmounting the country’s economic challenges would be shouldered by Tinubu after his swearing-in on May 29.
Many people believe that the former Governor of Lagos will replicate what he did in Lagos state once he assumes office as president.
But, there are great concerns, as economic experts says fixing Nigeria’s debt-burdened economy would be a hard nut to crack.
The Future Of Nigeria
A Professor of Economics at Lagos Business School, Bongo Adi, had a chat with journalists.
In that interview he insists that the debt incurred by Buhari’s government had mortgaged the future of Nigeria through heavy obligations.
Adi says in the coming days, it will be difficult for Nigeria’s economy because Buhari has left the country broke.
Loan Renegotiation
He suggested that the only viable option is for the incoming government to seek loan renegotiation.
To Adi, it is the practice internationally, provided the government has credibility.
“With such a colossal debt burden without apparent means of repayment, the already unsustainable debt profile undermines fiscal sustainability, no matter what the next government will do.
“There is another borrowing spree of $800 million from the Word Bank without how to pay back.
‘No Nice Days Ahead’
“They are taking advantage of borrowing to share among themselves as they want to exit because they know that nobody would hold them to account.
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“There is nothing else to talk about; Nigeria is broke. The coming days are not going to be nice at all.
“Because if you look at the horizon with this kind of debt, we are not bleeding only from the financial side but all ramifications.
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“Medical doctors and professionals of all cadres are leaving, so who will the government create the money to pay back the loans?
“The factors that drive economic activities are fast depleting,” he concluded.
Indeed, in the past two years, Nigeria has lost a chunk of his productive workforce to different countries, with the United Kingdom as one of the top beneficiaries.
