Salihu Lukman, APC chieftain has called on the Central Bank of Nigeria to take every measure necessary urgently and expeditiously to stabilize the Naira.
Lukman also tasked the Ministries of Finance and National Planning to provide all the intellectual leadership required to convert the false accusation that the APC-led government of Buhari is recklessly borrowing.
The director-general of the Progressive Governors Forum (PGF) in a statement in Abuja said a situation whereby the US dollar would appear to be on a roller-coaster against the Naira is simply unacceptable.
According to him, had the Naira to US Dollar exchange rate been stable in the last two years, most of the alleged debates about so-called recklessness against the government of President Buhari would have been long settled.
“Even with the worsening exchange rate reality, which on its own has further increased the Naira value of Nigeria’s debt portfolio given that under former President Jonathan, Naira was exchanging for N158 to the US Dollar,” he said.
“Currently, in September 2021, the exchange rate is N570. Note that the computation of both debt to GDP and debt to revenue ratios is based on the current exchange rate of N570.”
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Lukman affirmed that with respect to external and domestic debt, under President Buhari, Nigeria borrowed more, saying while it is legitimate to worry about Nigeria’s rising external debt portfolio, it may be helpful to go beyond the moral debate of implications to future generations.
“During the administration of former President Olusegun Obasanjo’s (1999 – 2007), external debt was reduced to $2.11 billion at the end of 2007.
However, the domestic component increased from N798 billion to N2.17 trillion within the same period.
“Under late President Umaru Musa Yar’adua (2007 – 2011), Nigeria’s external debt increased from $2.11 billion to $3.5 billion and domestic debt rose to N5.62 trillion.
“Similarly, between 2010 and 2015, during the tenure of former President Goodluck Jonathan, Nigeria’s foreign debt rose to $7.3 billion and domestic debt was N7.9 trillion.
“By June 2021, under President Buhari’s administration, Nigeria’s external debt has risen to $28.57 billion and domestic debt was N16.02 trillion”, he stated.
The PGF boss said debate about debt sustainability is estimated with reference to debt to Gross Domestic Product (GDP) ratio, being the monetary value of goods and services produced in the country within a given year.
He observed that so far, the debate about Nigeria’s debt is based on the absolute value of the amount Nigeria owes while variables of both GDP and revenue are ignored in the debate.
“Without any doubt, some of the concerns expressed in the debate are legitimate, especially in relation to problems of exchange rate, which has further increased Nigeria’s debt burden. But in terms of looking at other critical variables such as revenue profile and even performance of the economy, the debate is excessively politicisation.
