LCCI expresses worry over mounting public debt

The Lagos Chamber of Commerce and Industry (LCCI) has expressed concern over increases in public debt over the past five years, stressing that this is not healthy for the economy.

Nigeria’s debt has surged from $35 billion in 2010 to $67.7 billion as of December 2014, indicating a 94 percent increase in four years. Similarly, debt service payment has correspondingly risen, as the 2015 budget provides for N976 billion for debt service as against N418 billion four years ago.

“This implies an increase of 134 percent,” Remi Bello, president, LCCI, said, in its 2015 first quarter press conference held on Wednesday.

“We, therefore, call on the incoming administration to look critically into the continuous accumulation of debt in order to reduce the burden of debt service,” Bello said.

According to him, the major worry is that the bulk of the debts, especially domestic debts, are incurred for the purposes of running the government, stressing that this is reflected in the relativity of recurrent and capital budgets over the years.

The chamber also sees increased government borrowing from the domestic financial markets as a major source of distortion of the financial intermediation process in the economy, stressing that the value the economy can derive from the banking institutions is inherent in effective intermediation.