The Center received with grave concern the World Bank Macro Poverty Outlook for Nigeria which described the nation’s fiscal condition as “a more fragile position than before the late 2021 global oil price boom,” putting the country’s National poverty rate at 41.1%, and revealed that the country used 96.3 percent of its revenue generated in 2022 to service debt, consequently worsening the nation’s public debt profile.
This report stated that the number of Nigerians living below national poverty line will rise by 13 million between 2019 and 2025 in the baseline projection; and it is coming when government own data recently disclosed by the Director General of the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Olawale Fasanya, indicated that over two million businesses in Nano, Small and Medium Enterprises (nMSMEs) subsector were lost between 2017 and 2021 alone, rendering more than six million Nigerians unemployed. This is aside the 133 million other Nigerians living in poverty according to the National Bureau of Statistics (NBS) 2022 Multidimensional Poverty Index report. This would take the figure to 146 million Nigerians if nothing is done substantially to lift people out of poverty.
Again, this is also coming on the heels of the government recent decision to borrow another $800 million as palliative to cushion the effects of fuel subsidy removal, adding to the public debt stockpile of $103.11 billion or N46.25 trillion as at December 2022 according to figures by the Debt Management Office (DMO). The figure is projected to be N77 trillion before the end of the current administration if the Ways and Means Advances from the Central Bank of Nigeria are securitized, and other loans are included.
The Center is bothered by the consistent revenue shortfalls, and despite the deregulation of the oil sector, the cost of petrol import continues to rise with no solution in sight. This is amidst government several promises of revamping the refineries to boost local production; the country’s inability to address the lingering cases of oil theft, diversify the nation’s economy, and recent monetary policy somersault has put the country on edge.
Consequently, the Center recommends the suspension of the $ 800 million loan which lacks proper accountability framework, and may not make any meaningful impact on ordinary citizens, but will only further aggravates the public debt stockpile. This position is made in view of our assessment of previous social investment programs such as the Covid-19 stimulus package which the government reportedly spent N2.3 trillion; also, the tradermoni, conditional cash transfer scheme, government enterprise and empowerment program (GEEP), school feeding program and other social investment programs is said to be costing the nation $ billion annually according to the Minister of Humanitarian Affairs, Disaster Management and Social Development, Sadiya Umar Farouq, since the government came to power in 2015. The government has not demonstrated transparency and accountability in the implementation of past social investment programs, hence, the Center is not convinced that the planned payment of 5,000 to 10 thousand households over a period of six months will be any different from previous programs.
We strongly recommend that the nation’s fiscal handlers, especially the incoming government must ensure that future borrowings are strictly to fund capital projects and the production sector of the economy, rather than the current system of borrowing for consumption and fund recurrent expenditure.
As a Center, we cannot overemphasize the need for fiscal prudence in government’s day-to-day activities. We suggest the entrenchment of transparency and accountability measures to curb public sector corruption and resource wastage. It could be noted that the current pressure on the fiscal side of the economy is linked to inefficient public spending, mismanagement of public resources and the lack of accountability which continue to affect investors’ confidence and impacts on private sector growth.
Head, Public Relations