- Oby Ezekwesili wants the federal government to stay away from floating $2.8 billion Eurobond as being planned
- Ezekwesili notes that Nigeria currently spends 69 percent of its revenue on servicing both local and international debts
- She wants the government to look at other avenues to shore up its revenue rather than focus on loans
A former vice-president (Africa) of World Bank, Oby Ezekwesili, on Monday, October 15, advised the federal government to suspend its plan to raise 2.8 billion dollars in Eurobond to fund the 2018 budget.
Ezekwesili, who headed the education ministry under former President Olusegun Obasanjo, said this in Lagos in reaction to the statement made by the finance minister, Hajia Zainab Ahmed, on Sunday, October 14, that the government would soon float the bond.
The News Agency of Nigeria (NAN) reports that Ezekwesili said the plan to borrow more was not good for the health of the economy.
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She argued that the country currently spent 69 percent of its revenue on servicing both local and international debts.
She added that borrowing more was not a sustainable step as the country was not generating much revenue to cater for its critical development needs.
“What, in my view, the plan to float the bond portends for the economy is that the federal government is digging in instead of digging out.
“Already, the debt service to revenue is so high. Today it is 69 percent. Sixty-nine percent of revenue is used to service our debts.
“That is not a sustainable situation. I see the government quote all the time `debt to GDP ratio’, but that is like a blunt instrument in an environment where your GDP is not reflective of your productivity.
“We measure your productivity by the revenue the GDP generates in the form of revenue of government that comes as a result of the GDP.
“Your debt to GDP is three per cent and you think that gives you the legroom to borrow and borrow. No, that is not your instrument.
“Your instrument is your debt service tool, which is the revenue,” she said as she urged the government to avoid plunging the country to insolvency someday with borrowings, by exploring innovative ways to increase revenue.
She particularly urged the government to diversify revenue sources and pursue deep sector and structural reforms to reposition the economy.
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The former World Bank VP urged the country to prioritise its needs and deploy limited resources only in those areas with massive impact on development.
Ezekwesili, a presidential candidate of Allied Congress Party of Nigeria (ACPN), said the economy was in need of workable policies for revival, and promised to cause an economic turnaround if elected.
NAIJ.com earlier reported that President Muhammadu Buhari requested a National Assembly resolution to raise $2.78 billion from the International Capital Market for part-funding of the 2018 budget.
Buhari’s request came in a letter dated July 23, and read by President of the Senate, Bukola Saraki, at plenary on Tuesday, October 9.
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Source: Naija.ng
