‘Why government should muster will to address socio-economic challenges’

By Victor Uzoho
Experts from the different spectrum of the Nigerian economy have said that the inability of the
various governments to muster the needed political will to tackle the entrenched structural problems with the country’s economy remains a challenge in effecting the necessary changes.
The experts maintained that the recent increase in the debt profile of the nation exposes it to the looming danger associated with increasing debt burdens.
They cited the need to explore the possibilities available in restructuring Nigeria’s debt profile within the sustainable level, with minimal negative impacts on socio-economic growth and development.
Specifically, the Vice-Chancellor, Covenant University, Prof. Aderemi Aaron-Anthony Atayero, represented by the Deputy Vice-Chancellor, Prof. Akan Bassey Williams, said concerns are predicated on the government’s inability to meet debt repayment obligations alongside other socio-economic responsibilities in the face of the prevailing low revenue and export profile of the Nigerian economy.
Speaking at the 2020 National Budget Roundtable and Panel Discussion, organised by the Covenant University’s Centre for Economic Policy and Development Research (CEPDeR), he noted that though experts projected Nigeria’s sovereign debt to be at a reasonable 20 per cent of the Gross Domestic Products (GDP), her debt services to revenue ratio is reported to be over 50 per cent, which is exceedingly higher than the maximum 22.5 per cent prescribed by the World Bank.
“In the opinion of the African Development Bank (AfDB), the increase in Nigeria’s debt has heightened the fiscal burden in the already fiscally and growth constrained environment. This raises concerns regarding the sustainability of external debts,” he said.
Giving the keynote address, Director-General, Budget Office of the Federation, Prof Ben Akabueze, represented by his Technical Adviser, Prof. Olumide Ayodele, stated that for the nation’s budget to be effectively implemented, funding is key.
He maintained that in Nigeria, the emphasis has been on budgetary allocation more than it has been on revenue generation even when the primary responsibility of the government is providing adequate security for the masses, noting that this has had a negative effect from the concentration on the nation’s oil wealth.
His words: “It is when you have a secured and conducive environment that you can talk of human capital development. Emphasis has been on the expenditure side of the budget and this has been because of the oil wealth effect since the time of the oil boom.”
He stated that Nigerian analysts should focus on sub-National budgets in order to engender the required development needed at the grassroots, saying that the main challenge to the financing of the budget by the Federal Government was the poor revenue performance that can be attributed to several factors.
Speaking on revenue generation, he noted that the COVID-19 pandemic is having a negative impact on the Value Added Tax (VAT), domestic income, foreign trade, and oil prices in the global financial market.
In his remarks, Chair of the centre, Prof. Evans Osabuohien, noted that the roundtable was aimed at impacting the economic wellbeing of Nigeria and the African continent and linking research to policy and practice.
He said the emerging technical partnership with the African Capacity Building Foundation (ACBF), and African Union (AU)’s specialised agency for capacity development programmes across 48 African countries and eight regional economic communities would entail the dissemination of the policy briefs to other African countries.