By Dipo Olowookere
The federal government has described the current debt levels of Nigeria as comparatively good, noting that the major worry, for now, is how to diversify the economy to increase the revenue sources.
Last week, the Governor of Edo State, Mr Godwin Emefiele, shocked many Nigerians when he said the nation was currently undergoing a huge fiscal crisis.
He said the federal government printed N60 billion to share to the state governments in March 2021 when the revenue generated in February was not enough to meet the demands of the other tiers of government. This sparked reactions from Nigerians.
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, while speaking with the Africa Department Director of the International Monetary Fund (IMF), Mr Abebe Selassie, blamed COVID-19 for the challenges the nation was passing through at the moment, saying that the country was gradually getting back on its feet when the global health pandemic struck in 2020 and reversed the gains achieved so far.
However, she said the careful implementation of some policies of the government ensured that Nigeria exited recession it slipped into last year with the 0.11 per cent growth in the gross domestic product (GDP) in the fourth quarter of 2020.
“Although the GDP recorded a growth rate of 0.11 per cent (year-on-year) in the fourth quarter of 2020, in contrast to -3.62 per cent in Q3 2020 and 2.55 per cent in the corresponding period of 2019 (NBS), and inflation creeping through 17.33 per cent, we are a bit encouraged by the recent IMF forecast of 2.5 per cent,” she said.
The Minister praised the effectiveness of the Economic Sustainability Plan (ESP) with the support of development partners, including the World Bank Group (WBG) last year.
According to her, the policy trade-offs of the government quickly filled the deepening gaps created by the COVID-19 crisis as “it did not only push us back to a recession but also reversed most of the development gains recorded in the past decade.”
Debt levels sustainability
While commenting on the nation’s debt sustainability, Mrs Ahmed said that the government was committed to addressing the issue as the administration was “mindful of our experiences in this regard and the credibility and commitment of President Buhari to transparency and accountability in public expenditure.”
“We take note that our current debt levels are comparatively good, but we are aware of the pressures on debt services and commend the WBG and The Group of Twenty (G20) for the debt service suspension initiative (DSSI).
“However, with current obvious limitations of the DSSI, we may not embrace it, and would prefer to focus on diversifying our economies and enhance efforts at revenues mobilisation and other best practices and would appreciate the understanding and strong support of the IMF in expanding the monitoring and reporting of all public spending, as well as ensuring easy public access to spending data.
“We commend the extension of the DSSI to 2021 as a positive step, but there is a need to address the apparent reluctance of the private creditors to participate in the initiative as their participation will ensure a meaningful treatment of debt challenges of countries requesting support under this framework,” she said.
COVID-19 vaccine supply
The Minister said discussions with multilateral institutions such as the IMF could not be thorough without discussing the ongoing COVID-19 vaccination.
“The vaccination programme for Nigeria has been progressive and is gradually yielding needed results. As at the time of this meeting, slightly less than a million doses of the vaccine have been administered, representing less than 0.5 per cent of the population of the country.
“We are working assiduously to cover much ground by ensuring that as many as are willing to be vaccinated are promptly attended to,” she said.
She further said, “However, Nigeria like many countries in Africa, is concerned about adequate supply. The proper thing maybe for producer countries to release their excess stock of vaccines to developing countries that currently have limited or no access.
“We would appreciate your assistance in that regard. Similarly, multilateral institutions such as the IMF/World Bank are encouraged to continue to pool resources together, particularly the COVAX facility and the African Union (AU) initiative to support local manufacturers in the production of vaccine in Africa. “
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