Nation
‘Nigeria’s External Debt-To-Revenue Up 400% In 10 Years’
Nigeria’s external debt to total revenue increased from 8 per cent in 2011 to 400 per cent in 2020, a former governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi, has said.
Sanusi lamented the situation while participating in an online roundtable discussion tagged, “Debt Relief for a Green and Inclusive Recovery in Nigeria”, organised by Heinrich Böll Foundation.
The former CBN governor said Nigeria has a debt services ratio of up to 90-96 per cent but there are certain other elements of debts that analysts have not paid attention to.
He said, “If you go through the CBN statistical bulletin, in 2011, the total federally collected revenue from all sectors was N18.9trillion at N165 to the dollar. This will have placed federally collected revenue in 2011 at $55.5billion.
“Meanwhile, debt at that time was $5billion, so, we had an external debt to external revenue of about 8 per cent in 2011. By 2020, we have an external debt of about $33.4billion but all revenues in 2020 were about $8.3billion. So, it has moved from 8 per cent to 400 per cent between 2011 and 2020.
“And this is a serious red flag that I’ve not seen being pointed out in the conversation around debt sustainability especially given the facts that exports are yet to be diversified at the book of our revenues from oil sectors given what we’ve seen and what have been discussed today about the prospect of hydrocarbons as we move into a greener world.”
Nigeria’s debt position has been a source of concern for development experts in recent years, especially in the midst of dwindling oil revenue.
Sanusi, who was recently deposed as Emir of Kano, noted that in measuring debt sustainability, the debt to Gross Domestic Product (GDP) ratio is a useless metric.
“You do not service debt out of GDP, you service debt out of revenues,” he said.
“If only 20 per cent of your GDP is paying taxes, if you have a debt GDP ratio of 20 per cent, you are likely to have a debt service to revenue ratio of 100 per cent.
“So, for a long time, I have been concerned about this idea that if (having) 25, 30 or 35 per cent debt to GDP ratio is fine, because you’ve got countries that are activating 90 per cent.”
He added that in the countries where debts to GDP numbers are high, tax is a major component of government revenues.
Sanusi also explained that high interest rates with high debts could lead to difficult financial situations.
He also explained further that another key part of the nation’s debt profile is the components of bilateral loans, of which China is a major player, with $3.2billion of Nigeria’s $4.1 bilateral debt, that’s about 78 per cent.
He explained that any talk about debt sustainability has to involve China as a very dominant player.
The former CBN governor agreed that the call for debt relief is in the right direction, but the nation needs to show serious commitment and review the structure of its government and economy.
He noted that as countries begin to lift Covid-19 restrictions on travels, there will be increased demand for forex on travel, further putting pressure on the country’s exchange rate.
“When the world reopens and people start travelling, that is going to lead to an increase in demand on forex for travel and that is going to exert further pressure on the balance of payments.
“Now, these are the kinds of considerations I think we need to bear in mind when we talk about the sustainability of a debt situation.
“Honestly, I think debt relief is very necessary if this country is going to have the fiscal space to pursue any kind of developmental objectives. We can’t be spending 90 or 100 per cent of our revenue on debt service and don’t have anything to invest in development.”
According to Sanusi, the country needs to invest in education and agriculture, stressing that these two sectors will help play a key role in lifting Nigerians out of poverty.
Part of the problem Nigeria faces, he said, is that there has been significant under-investment in education and health care, and the productivity of agriculture.
“And these are the kinds of things that we need to lift people out of poverty and bring sustainable growth,” he argued.
The former chief executive of First Bank also explained that the rapid rate of growth in population is a source of concern, adding that the country needs to have social policies around demographic growth.
“There are parts of this country where the fertility rate is more than eight (8) live births per woman, and again some societies are also polygamous,” he said.
“Now there’s no way that you are going to continue growing at 3.4 or 4 per cent when your economy is growing at a slower rate and expect to deal with poverty. And that is an unsustainable model.”
He also noted that setting up factories could help lead to economic growth.
He said, “One of the issues I have with people when they talk about removing the subsidy on electricity tariffs and how the tariffs are going to go on to avert some problems is that we worry so much about tariffs because we use electricity for consumption and the buck of the population is yet to understand that electricity is an import into production. You can’t burn it.
“So, if you take away the subsidy by having a cost recovery tariff, you could put that money into small and medium enterprises that will turn that electricity into real production of goods and services and lift people out of poverty.
“Now, it doesn’t have to be fossil fuels electricity, you can in the same way, for example, use these bonds to encourage setting up factories to produce solar panels. People talk about renewable energy but if you are going to be importing solar panels from China or the UK, it is not as effective as if you set up factories to produce these panels in Nigeria. You’ve got all the raw materials you need to produce solar panels.
“So, set up factories, produce these panels and then the subsidy come in, in form of making these panels affordable and the kind of financing you give to the micro-enterprises to turn this renewable energy into goods and services.
“Not just about producing renewable energy that will continue to be fuelling television sets, water kettles, video games, no; we want electricity so that micro, small and medium enterprises can begin to generate.”
Sanusi argued further that a very smart way of dealing with debt relief is to effectively ensure that government puts in the right policies and that money goes into the right areas that will lead to sustainable development.
He noted that what happened when debt relief was granted to Nigeria in the past was that Nigeria went back on spending on overheads, unnecessary petroleum subsidies, and subsidies on fertilisers, which has not helped the country.
“What happened in the past was that we had this debt relief and then we went back to borrowing money, spending on salaries, overheads, and unnecessarily petroleum subsidies all sorts of fertilisers sub discount and those are the kind things that need to end,” he lamented.
“But we also need to bear in mind that as we take them out, the way to minimise impact is to address the real SDGs considerations, education, healthcare, renewable energy accompanied by training, the productivity of agriculture and this is really about the policy deficit that we’ve had in the last few decades,” he said.
The Executive Secretary of the Pension Transitional Arrangement Directorate (PTAD), Dr Chioma Ejikeme, has reiterated the commitment to service delivery for pensioners.
Ejikeme said this during the Customer Service Week in Abuja, yesterday.
He said that commission had a mandate to deliver good service delivery to the pensioners.
Ejikeme, who was represented by the Director Civil Service Pension Department, Mr Kabir Yusuf, said that the customer service week was important to operations of PTAD.
“Customer service is the support that you give to a customer, whether it is an existing customer or potential customer in the process of delivering or making enquires about a service.
“To be a good customer service representative you need to be knowledgeable, have good attitude and attribute especially to the senior citizens and have empathy,” he said.
Ejikeme said that all PTAD staff had most of the attributes of a good customer representative.
“We provide excellent customer service by going to verify our aged pensioners who cannot do it by themselves anywhere across the country.
“There is a dedicated team that was mandated to go round to confirm the aliveness of those who can not confirm their aliveness either because the are too old or have health issues,” the executive secretary said.
The National Coordinator, SERVICOM, Mrs Nnenna Akajemeli, said that the official theme of the 2024 customer service week was “ We Go Above and Beyond For Our Customers.”
She commended PTAD and the SERVICOM team for organising the 2024 customer service week.
“This is in line with the best practice of celebrating frontline workers and service takers.
“Customer service week is celebrated annually during the first full week in October.
It calls attention to the importance of people to boost morale team work and departmental collaboration in supporting pensioners.
“ It is a platform to reward employees for the significant work they do,” Akajemeli said.
She said that the objective of the customer service week was to celebrate the hard work and dedication of employee who strived to create positive customer experiences.
She said that it was time to show customers that the organisation valued their experience and feedback, through comment cards, dedicated hotline, among others.
Akajemeli said that it raised awareness internally and externally about the importance of good customer service in building customer loyalty and satisfaction.
She said that the benefit was to increase motivation, show appreciation, encourage friendly competition, boost employee retention, create a positive workplace and increase productivity.
The Head, Surveillance Department at the National Pension Commission (PenCom), Mr Abdulrahman Saleem, said that good service delivery was the key success of every establishment.
Salem said that PTAD operated with standard, considering the success it had achieved so far.
Saleem said that pensioners required the best service attitude and behavior.
“ I give kudos to PTAD for its efforts and encourage it to do more.
“Therefore I urge PTAD staff to keep up the standard and continue to give good service to the pensioners,” he said.
The Chief of the Air Staff (CAS), Air Marshal Hasan Abubakar, has honoured Flying Officer David Sangokoya for winning the 2023/2024 Royal Air Force College Cranwell International Cadet Sword of Honour.
Abubakar honoured the officer during the presentation of cheques to 13 beneficiaries of the Nigerian Air Force (NAF) Group Personal Accident Insurance Policy (GPAIP) in Abuja, yesterday.
He described the achievement as ground-breaking as it was the first time an African cadet had won the prestigious award since the Academy’s creation over 100 years ago.
According to him, the feat underscores the excellence that exists within NAF, and proof that NAF officers and cadets can stand shoulder to shoulder with the best in the world.
“To our awardee, you have set a new standard, not just for your peers, but for every cadet and officer that will come after you.
“This accomplishment is a powerful reminder that no goal is out of reach when one is armed with dedication, discipline and an unwavering commitment to excellence.
“Your journey as an officer has begun with this prestigious accolade, but the true measure of your success will be seen in how you serve, lead and contribute to the mission of NAF and the defence of our great nation.
“As we celebrate this historic occasion, we extend our deepest gratitude to the United Kingdom Government for its unwavering support in providing world-class training opportunities to our personnel.
“This has enabled our officers and men to gain invaluable skills and knowledge, strengthening not only our bilateral ties but also our collective ability to address global security challenges,” he said.
The CAS said that the NAF looked forward to continuing the fruitful partnership for the mutual benefit of Nigeria and UK countries.
He expressed gratitude and unflinching loyalty to President Bola Tinubu for his commitment to the welfare and training of members of the Armed Forces of Nigeria, and NAF in particular.
“I must also take a moment to extend my heartfelt appreciation to the leadership of the Nigerian Defence Academy and the instructors who helped to mould and prepare this cadet for the global stage.
“Their dedication and commitment to developing top-notch officers is evident in this ground-breaking achievement.
“You have not only trained a leader but have given the Nigerian Air Force a legacy we will all cherish,” he said.
National Health Insurance Authority (NHIA) has advocated private sector involvement to strengthen Nigeria’s healthcare system.
The Director-General of the authority, Dr Kelechi Ohiri, made the call at a high-level policy dialogue on sustainable health system reforms in Nigeria in Abuja, yesterday.
The Tide’s source reports that the dialogue was organised by the Healthcare Federation of Nigeria (HFN), a coalition of private sector stakeholders, to address the multifaceted challenges plaguing the country’s healthcare system.
The dialogue has “Private Sector Support for SWAP (Sector Wide Approach) in Healthcare” as its theme.
Represented by Dr Yakubu Agada-Amade, the NHIA Director of Standards and Quality Assurance, Ohiri explained the crucial role of private sector collaboration in strengthening Nigeria’s healthcare system
He highlighted the “One Plan” under the SWAp framework, which seeks to unify health sector efforts, ensuring efficient resource use, effective governance and expanded healthcare access.
He also stressed the importance of overcoming barriers that historically hindered the implementation of healthcare interventions in Nigeria, such as inadequate financing, weak governance systems, and bureaucratic bottlenecks.
He added that “the dialogue explored innovative approaches, including digital health innovations and financing mechanisms to accelerate the implementation of the National Health Act and mandatory health insurance coverage.
“With enrollment in health insurance growing by 14 per cent over the past year, NHIA can push for greater inclusivity, particularly targeting the informal sector through flexible payment systems and partnerships with telecommunications companies.”
He called for stronger synergy between public and private health actors to ensure universal access to quality healthcare and sustainable reforms in line with the Nigeria Health Sector Renewal Investment Initiative (NHSRII).
Panelists from the Association of Nigerian Private Medical Practitioners (ANPMP), Healthcare Providers Association of Nigeria (HCPAN) and Health and Managed Care Association of Nigeria (HMCAN) echoed the sentiments, underscoring the private sector’s role in expanding insurance coverage and improving healthcare delivery.
They commended NHIA’s efforts toward driving reforms to achieve Universal Health Coverage (UHC) through the Sector-Wide Approach (SWAp).
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