The Centre for Democracy and Development (CDD) has said that the nation’s rising debt profile is not sustainable especially that it accounts for over 60 percent of the total government revenue base.
This is contained in the five-year Assessment Spotlights of Buhari’s Performance on the Economy’ released on Wednesday and signed by the CDD Director, Idayat Hassan.
Daily Trust report that the two Chambers of the National Assembly separately approved a total of $28.2bn loan request in their Tuesday’s separate sittings.
While the Senate approved President Muhammadu Buhari’s request for $5.51bn in external borrowing from multilateral lenders, for COVID-19 and “priority projects”, the House of Representatives also approved a $22.7bn earlier rejected last year, after it considered the report of its Committee on Aids, Loans and Debt Management.
The CDD report said relying on a vast array of data sources, the assessment interrogates the core issues which have underpinned conversations around building an economy which would create jobs and pull a sizeable number of Nigerians out of the trap of poverty.
According to the report, President Buhari should focus on a few key areas including reducing the quasi-fiscal role of the CBN; improving credit infrastructure; leveraging digital technologies to embrace open governance principles; and making good on plans to invest significantly in human and physical capital, while addressing long-term bottlenecks to growth.
According to the report, the Buhari administration inherited an economy in decline in terms of growth rate of the nation’s Gross Domestic Product (GDP) and that between 2013 and 2014, the economy grew above six percent which was more than double the annual estimated population growth of 2.6 percent.
“As has been the case in previous boom cycles, the buoyancy experienced in the 2013 to 2014 period was connected to improved receipts from sale of crude oil.
“However, the unpredictable crude oil market soon got disrupted hitting Nigeria hard with economic growth reported to have declined from about 6.0 percent in Q4 2014 to 4.0 percent in Q1 2015 and further to 2.4 percent in Q2 2015,” the report said.
It noted that power cuts remain relatively frequent as substantial progress, particularly in the distribution network, has not been made towards providing better power supply to customers.
“As a result, businesses continue to provide their own electricity supply through generators with some businesses going completely off-grid, thus increasing the cost of production and reducing their profit margin,” it stated.
The report which highlighted some of the bright spots in terms of policy initiatives, and the push by the government to get things going for the economy, said that one of such promising areas in terms of policy is what the Presidential Enabling Business Environment Council (PEBEC) has been doing in the area of ease of doing business.
The assessment also gives due credit that owing to reforms in the business environment, Nigeria was named as one of the top-ten economies across the world with the most notable improvements in doing business in both 2019 and 2020.
The other area of good scoring for the administration on the economy, according to the report, is the Finance Act 2019, which was described glowingly as a policy game changer implemented by the administration.
On the negative side, the report score the administration low for job losses and the increasing poverty in the land.
“Data referenced in the report have it that about 4.04 million persons lost their jobs in 2015, as unemployment and underemployment rate increased from 6.4 percent and 17.9 percent in Q42014 to 10.4 percent and 18.7 percent in Q42015.
“The assessment informs that in the period under review, unemployment rate was high among youths, as about 5.3 million youths within the age bracket of 15-24 could not get a job in 2015. The high rate of unemployment and increased poverty partly triggered the security challenges in the country, which was a key campaign promise of the President. These challenges set a slow start for President Buhari’s administration,” it said.
The report refers to how lower government revenue resulting from the ‘twin shocks’ (COVID-19 and oil) will further saddle Nigeria with a huge debt burden.