By Juliet Jacob Ochenje
The Director-General, Budget Office, Mr. Ben Akabueze has said Nigeria currently has a “limited borrowing space” due to its poor debt-to-revenue ratio, stressing that trouble awaits the nation if it surpasses its limits.
Akabueze, who raised the alarm in Abuja, while speaking to newly members-elect of the 10th National Assembly at the weeklong induction ceremony, noted that while Nigeria’s debt-to-GDP is still healthy, the country’s debt-to-revenue ratio is not.
He said: “You may have heard that we have one of the lowest Gross Domestic Products-to-debt ratios in the world. While the size of the FG budget for 2023 created some excitement, the aggregate budget of all the governments in the country amount to about N30tn. That is less than 15 percent in terms of ratio to GDP.
“Even on the African continent, the ratio of spending is about 20 percent. South Africa is about 30 percent; Morocco is about 40 percent. And at 15 percent, that is too small for our needs. That is why there is fierce competition for the limited resources.
“That can determine how much we can relatively borrow. We now have very limited borrowing space; not because our debt to GDP is high, but because our revenue is too small to sustain the size of our debt. That explains our high debt service ratio. for Nigeria to be able to fix the infrastructural needs of the country, we need to be spending about $100 billion annually as a country, including private spending on infrastructure.
“The aggregate budget of the federal government is only about $30 billion and the aggregate of the states and FCT budget don’t even add up to the federal budget. This means that even if we spend everything, we will still be left with a huge infrastructural deficit,” said Akabueze.
