… Legislature responsible for the country’s debt problems

Amid devastating insecurity, high food prices, poverty and rising inflation, the Center for Legislative Defense and Civil Society on Monday sounded the alarm about the administration’s indifference to the country’s crippling debt crisis.

Barely two decades after exiting from Paris Club debt, Nigeria has plunged further into a debilitating debt trap following the wave of borrowing launched by the country’s administration, the center said.

Speaking to reporters about “the role of private creditors in the Nigerian debt crisis and the human cost,” civil society executive director Auwal Ibrahim Musa Rafsanjani said, “In the context of Nigeria, around the 90 percent of government revenue is dedicated to debt service at the expense of development projects.

Concerned that little or no attention is paid to the country’s debt crisis, CISLAC, in association with Christian Aid Nigeria, launched a year-long investigation with a view to finding a solution to the debt situation.

While stating that private creditors on the international financial stage have established a new dimension in Nigeria’s debt crisis, the director expressed concern about the impact of the situation on the government’s fiscal soundness and its ability to respond to socioeconomic emergencies.

He reflected on policy options to address the debt emergency, arguing that “Nigeria is already in another debt trap. The records of national and international debt and financial institutions regarding Nigerian debt reveal a state of crisis.”

“According to the Debt Management Office, Nigeria’s total stock of public debt as of June 30, 2022 was 42.84 trillion naira.”

“It is instructive to remember that the cost of Nigeria’s debt service exceeds its income with clear signs of economic dangers ahead.

“There are implications for this increase in the debt stock in Nigeria, with total external debts amounting to about $40 billion and a private credit composition of $15.9 billion, representing 39.8% of the external debt stock. total. Eurobonds take most of the commercial loans with a total portfolio of 15.620 million dollars”.

The director criticized the lack of transparency in lending and borrowing and the inability to trace the funds, largely attributing the situation to the indifference of lawmakers in granting loan applications to the detriment of the Nigerians whose interests they were chosen to protect.

“We are deeply concerned by the lack of vigorous scrutiny and attention by lawmakers in granting loan applications without reflecting the provisions of the Fiscal Responsibility Act, and the increased involvement of the nation’s economic state.”

“Nigerian lawmakers have a constitutional and legislative mandate to approve loan applications only on the basis of public interest and must make this clause a prerequisite for any approval they wish to grant to the president’s requests for more loans.”

Rafsanjani revealed that CISLAC with the support of its partner, Christian Aid, is passionate about improving the urgency with which governments address the country’s debt crisis.

He said this solution included commissioned research to fully highlight the Nigerian context and dimensions of indebtedness to private creditors for policy options and deliberate efforts to end it.

“We have launched a research product that focuses on exposing and challenging the role of private creditors in hindering people’s recovery to enhance the urgency with which the international community must address the sovereign debt crisis.”

“This research was commissioned with the support of Christian Aid, to fully highlight the Nigerian context and dimensions of indebtedness to private creditors for policy options and deliberate efforts to end it.”

“Its objective is to contribute to an international financial architecture and a macroeconomic environment that allows the fulfillment of human rights and the realization of climate actions in the economy that focus on care.”

The Center urged “all state and non-state actors to heed this call and minimize collective action to nip this problem in the bud as we head over a fiscal cliff, in the interest of the growing population of poor Nigerians whose lives are threatened. affected by the crisis.