Nigerian official defends government borrowing plan amid criticism over debts

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A higher score from a ratings agency generally means cheaper borrowing for governments
A higher score from a ratings agency generally means cheaper borrowing for governments

A senior Nigerian official on Thursday defended the government’s highly criticized borrowing plan and debt profile over the years, explaining that the aim was to support economic growth and stability.

Patience Oniha, the director-general of the Debt Management Office (DMO), said on the sideline of an awareness program on security issuance in her office that borrowings by countries to finance budget deficits and critical infrastructure are not necessarily bad.

Oniha, who said all countries across the world did government borrowings, mostly to finance critical infrastructure, added that the multiplier effects of quality infrastructure on a country’s economy cannot be quantified.

She said that successive Nigerian governments have had to resort to borrowing to fund budget deficits, adding that annual budgets would be affected if funds were not raised to support them.

“Debt has become so topical in Nigeria that sometimes it almost looks as if borrowing is an offense or a crime,” the official said.

“The first thing we must understand is that countries across the world borrow, be it poor countries, advanced countries, developed countries, or emerging markets. They all borrow, “she added.

“We usually hear complaints that debt levels are rising in Nigeria. Globally, debt levels are rising, not just Nigeria,” the DMO official said, adding that the COVID-19 had also made borrowing an imperative for some countries.

“We need to create incentives for the private sector to continue operating in order to avoid a big recession because most countries experienced a recession,” she said.

According to her, there are statutory laws that regulate borrowing by governments at various levels and also prevent abuse of the process. Enditem

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