…calls for responsible borrowing, lending
The Catholic Church of Nigeria, Gboko Diocese, Benue State has cautioned Federal Government over increasing debt profile, saying Nigeria’s debt is on inceease due to misapplication of loans to fund recurrent expenditure instead of capital expenditure that will create positive multiplier effects in the economy.
At a day workshop held by Catholic Diocese of Gboko, Benue State, Joe Nkamuke of Good Governance, Justice Development and Peace Commission, pointed out that Nigeria currently uses 74% of her revenue to service debts, which showed an irresponsible borrowing, emphasising the need for responsible borrowing and lending.
Read also: Nigeria’s debt service to revenue reduced to 68% from 97% — Tinubu
Nkamuke, who alleged that “at present, our leaders have borrowed for us”, noted that Nigeria’s debt rose from N24.33 trillion within 3 months from N97.34 trillion in December 2023 to N121.6 trillion in the first quarter of 2024.
“Every Country is borrowing. But the question is: what are you borrowing for? That is the difference between responsible and irresponsible borrowing”, he added.
The Catholic Church expressed concerns that from 2015, Nigeria was moving from the path of loan sustainability to a loan trap.
Read also: Nigeria’s debt service-to-revenue ratio to hit 110.4% in 2024
According to public sector economists, said Nkamuke, “the escape routes are responsible borrowing, proper use of loans for building advanced infrastructure and enhanced public services like health care, education and infrastructure.”
“They also posited that loans could become a trap if their utilisation is directed towards consumption, servicing corrupt officials and their surrogates and mismanagement.”
The Catholic Church further noted that the high external loan-service- to-revenue ratio was a great source of concern, highlighting the need to significantly increase the Country’s revenue generation capacity.
“Even when Nigeria’s debt servicing dropped from 1.76 trillion to 1.31 trillion naira in 2024, that load could potentially crowd out expenditure in other areas. Furthermore, high loan debt levels have led to a cost – of – living crisis through inflation, currency depreciation, subsidy removal and imposed austerity measures”, said Nkamuke who is the Lead, Good Governance,Justice Development and Peace Commission.
Read also: Nigeria’s debt-to-GDP ratio seen rising to 25-year high
Earlier in the opening presentation entitled, “The role of JDPC engagement in the state”, Isaiah Ter, a Reverend Father and Benue State Coordinator of the Caritas Foundation for Justice Development and Peace, said that the Foundation offers pro bono humanitarian services for the public good.
Ter said that the Foundation conscientises the public on the imperatives of political participation, best and affordable agricultural practices and counselling of inmates in correctional centres among others.
