FG is working to protect Nigeria from debt crisis – DMO
Emeca Anaeto, Emma Uja & Babajide Komolafe in Bali, Indonesia
The The International Monetary Fund, IMF, has listed vulnerability to foreign debt as one of the main threats to economic growth among African countries, especially in the sub-Saharan group, which includes Nigeria.
But the Federation’s Debt Management Department (DMO) stated that the federal government is making efforts to protect the country from such a crisis.
The director responsible for Africa at the IMF, Mr. Abbe Selassie, who listed growth problems in Africa, said that the debts of countries are steadily increasing, which threatens their ability to deploy funds for economic development.
He also said that the effects of the growth in debt are the resources of countries that are used to service the debt, but rather investment in growth tools.
Selassie said that not only should debts be moderate, but also that revenues should improve to eliminate the weak debt-to-GDP ratio and the tax-to-GDP ratio.
But against the backdrop of this situation, the Director General, DMO, Ms. Terence Anich, speaking to reporters on the margins of the annual meetings of the Bretton Woods institutions, said that the federal government was at the top of the borrowing plan
She explained that the debt crisis means the inability to service a debt that does not apply to Nigeria.
She also stated: “Debt service means that you can pay off your interest and principal amount when it arises because the main focus of this review is actually related to income diversification. Perhaps the media chose this report and decided to focus on debt, which we said. ”
Onikha explained that the problems are related to low incomes, which led to low incomes to GDP.
She said: “We can’t stop talking about it, there are numbers, we don’t get as much income as we should. When you compare your income with your GDP, it is low. You just heard from this presentation that Malawi has a tax and income ratio of 18 percent, while we are talking about six percent ago, so something is wrong. We cannot escape from the fact that we need to get more revenue.
“Getting more income does not mean that we should focus only on increasing production in the Niger Delta or praying for higher oil prices, we have to generate long-term income. How do you create it? You must ensure that you comply with requirements that increase your tax base and ensure that those who pay pay the right amount, rather than just pay a small amount for escape.
“The option that we talked about here was about raising taxes, so let's look at it in context. I lived in Nigeria for a long time to know that something will happen to oil someday, we panic, why? Because oil at some point was calculated at 80% of our income, and most of our foreign currency comes from there, so we cannot shy away from tax revenues. ”
Earlier in the presentations by Selassie, Nigerian National Planning Minister Udoma Udoma said that Nigeria’s 19 percent debt-to-GDP ratio is still low enough not to pose a serious threat of debt crises.