Africa’s biggest economy spent over N18.6 trillion on debt services in eight years, an amount which was far higher than funds allocated to education, health, defence, and agriculture and rural development that would have increased the economic growth or standard of living of its over 200 million people.
For a country that has experienced two recessions in five years and has not expanded in per capita terms since 2015, one would expect that the Federal Government would do everything to ensure critical investment in financial and human resources that will help meet the country’s infrastructure needs and bolsters economic transformation.
The reverse has been the case, with the situation worsening yearly.
Dataphyte’s findings showed the size of Nigeria’s public debt has risen from less than N10 trillion in 2012 to a staggering N44 trillion in 2022, excluding N20 trillion ways and means borrowing from Nigeria’s apex bank.
Between 2015 and 2022, Nigeria’s economic managers under, President, Muhammadu Buhari have budgeted N18.6 trillion for debt servicing.
For most experts, the huge borrowing has not translated to the massive infrastructure revamp that the people are told to expect.
The trend is expected to continue in 2023 with the country earmarking the sum of N6.31 trillion for debt servicing and N5.35 trillion for Capital Expenditure.
This means Nigeria will spend 17.9percent more than it intends to spend on capital expenditure on debt servicing.
Between 2015 and 2023, Nigeria’s debt servicing figure would have increased by 564percent.
A Dataphyte report noted that Nigeria spent N9.94 billion daily on debt servicing in the first three months of 2022.
Also, Between January and June this year, Nigeria spentN1.333 Trillion on Domestic Debt Servicing and another $1.291 billion on external debt servicing.
The expenditure earmarked for debt servicing in 2023 is also more than the total allocation to critical sectors such as Health, Education, Water,Power, Defence, Works and Housing, Water and Interior.
The totality of the budget for these sectors will not still be up to the expected expenditure of the country on debt servicing.
The total budgeted expenditure for these sectors amount to N4.534 trillion as against debt servicing earmarked for N6.31 trillion.
Absence of infrastructure or enough investment in infrastructure has critical impacts on development. For instance to tackle the issue of out of school Children, Nigeria needs investment in capital development for schools.
A Dataphyte report noted that one out of every six children in Nigeria are out of school.
To create hope for the poor persons in the country expected to rise to 95.1 million persons in 2022, Nigeria needs more infrastructure investment.
To also diversify its economy, Nigeria needs to tackle the issue of poor infrastructure that has been blamed for business failures in the country.
Already the International Monetary Fund has warned that debt servicing may gulp all of Nigeria’s revenue by 2026, urging the country to tone down on public borrowing, although Nigeria’s public debt has continued to surge higher, hitting a ten year 467percent growth to N42.84 trillion in 2022, a development which increases the amount expected to be expended on debt servicing.
The World Bank has noted that to solve its challenges, Nigeria must tackle the issue of insufficient infrastructure, a need that huge spendings on debt servicing denies Nigeria.
Nigeria’s inability to diversify its revenue sources, has also continued to mean it depends on borrowings to finance its fiscal needs, amassing more public debt and in return more money to service these debts.