Ex-Statistician-General Kale: Nigeria has poor ability to repay debt

A former statistician-general of the federation, Oyeyemi Kale, says Nigeria’s repayment ability of debt is poor.

This, he said, has generated the perception that the country’s debt is huge beyond control.

In a series of tweets on Saturday, Kale opined that improvement in revenue generation would relieve the country’s debt.

He wrote: “Debt has 2 issues. What it is being used for & ability to repay. Debt/GDP represents capacity to repay & is 6-8-%, so there is revenue in the system to repay. But Debt/Rev which is ability to repay is poor at about 80% so not enough revenue is being retrieved from the system.

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“If ability is enhanced through revenue reforms so that ability is raised towards capacity then the conversation about our size of debt disappears. Nigerian debt is only perceived to be too much because ability to pay is poor despite an arguably comfortable capacity to do so.

“In a Nation that needs huge capital expenditure to develop, do we: 1. Curtail debt in the presence of poor revenues which slows development; 2. Borrow & focus energy on revenue reforms to repay debt; 3. Stop borrowing & generate the revenue first which also slows development.

“By the way, there are many other models to fund needed investments but my post is focusing on the particular issue of debt and its issues related to revenue and needed expenditure.”

The Debt Management Office (DMO) on Thursday revealed that Nigeria’s debt profile stood at N46.25 trillion as of December.

In a statement, DMO said there was an increase of over N7tr from what the country owned in 2021.

It stated that the reasons for the increase in the Total Public Debt Stock were new borrowings by the Federal Government and sub-national governments, primarily, to fund budget deficits and execute projects.