Nigeria’s rising debt profile without commensurate infrastructure development has become a major concern for many Nigerians.

For economic experts, the situation would be fatal for the successor to President Muhammadu Buhari as of May 29, 2023.

Recently, the Debt Management Office, DMO, said Nigeria’s total debt stock would reach N77 trillion by May 2023 if the Buhari administration’s 23.8 trillion Ways and Means Advances were approved by the National Assembly.

Contrary to the Central Bank Act 2007 (Section 38.2), which limits advances to the Federal Government of Nigeria to 5 per cent of last year’s revenue, the country’s central bank has provided FGN 55.3 billion in forms and means advances since Buhari took office.

Meanwhile, the Federal Government stated that it spent more than 80 percent of its revenue on debt service in the first eleven months of 2022.

Former CBN Governor Sanusi Lamido, CBN Deputy Governor Kingsley Moghalu and economist Doyin Salami had accused the bank of flaunting its law in different forums.

The Minister of Finance and Budget and National Planning, Ms. Zainab Ahmed, for her part, said there is no cause for alarm about the country’s debt profile because the nation has no record of default.

But experts say the significant implication is the government’s overreliance on short-term borrowing to finance its operations, as the government has had to pay higher interest rates to attract investors and because of runaway inflation.

Reacting to the development in a chat with the DAILY POST, a financial inclusion/wealth management expert, Mr. Idakolo Gbolade said the incoming government must be concerned about the country’s rising debt profile.

He said: “The outgoing government has been financing the budget through deficit spending and the 2023 budget will be no exception.

“However, an anticipated increase in our debt stock to Naira 77 trillion will have serious implications for the incoming government as it will incur higher debt service costs and major infrastructure projects will be affected.

“This will put pressure on the implementation of capital projects in 2023 and could lead to poor budget performance.

“The government’s decision to increase the country’s debt burden will be tantamount to spending the wealth of the future generation now. This continued borrowing without a stable fiscal plan will plunge Nigeria into a debt crisis if not handled properly.

“If you look at countries like the United States, for example, which has the highest stock of debt in the world, you will discover that the economy is adequately regulated with a debt ceiling that the United States Congress always debates annually before its approval despite from the fact that the US economy has the capacity for the stock of debt. This cannot be said of Nigeria.

“Nigerians should demand more accountability from the government if they rise to a position of authority through our votes.

“The Nigerian people should ask questions of all those who aspire to govern us and not just vote for overriding sentiments.

“The country cannot afford to pay down debts of up to N77 trillion currently unless the government creates more avenues for revenue growth.”

Furthermore, a professor of Accounting and Development Finance at Lead City University, Ibadan, Professor Godwin Oyedokun, said fears over Nigeria’s mounting debts are justified as Buhari is about to mortgage the future of unborn children. .

“It is not a crime to borrow to finance any government spending profile. My problem is that your expectations have been affected by the loan based on your payment structure. You will have problems if you want to buy Limozin and then borrow again. All you want to do is something that depends on borrowing.

“So when a government in power borrows to make capital expenditures, it’s good, but when you don’t execute what the money was borrowed for, instead the funds get bastardized and end up in the pockets of politicians, that is the main problem.

“When you continue to borrow that your expected income is no longer on par with the loans, you have mortgaged the future of Nigerians and those yet to be born. That is where this current government is going wrong. The narrative of our debt to Gross Domestic Product ratio is still small compared to other countries that cannot retain water. Because those countries that we are compared to, like the US, have systems that work. They have buffers and plans to keep going even when things aren’t there.

“As expected, you would borrow to the extent that the loan condition will lead to the extinction of the country, but when you borrow from a very toxic creditor, they will tell you not to do certain things unless you get permission from us. That is, the economic gurus will tell you that the precedence of conditions that follows is important because it will determine the development of the country.

“No financier will lend you without asking for something in return. Getting into debt is not bad; It is when you borrow without applying sense. I do not want to believe that those in charge of our economy do not understand the principle and policy of loans. One regime used theirs to advocate for debt forgiveness and another advocated for more loans.

“Nigeria needs to up the game; the main economic implication is that if the government goes into debt and the money is not diverted or used for recurring expenses, it is not bad, but if not, it means the ruin of the country”, he stated.