Nigeria, according to the Budget Office of the Federation, now has “limited borrowing space” because of its subpar debt-to-revenue ratio. The Budget Office says trouble awaits the nation if it surpasses these boundaries.
Ben Akabueze, director-general of the budget office, noted that while Nigeria’s debt-to-GDP ratio is still healthy, the country’s debt-to-revenue ratio is not. He was speaking to members-elect of the 10th National Assembly on Wednesday at the weeklong induction ceremony in Abuja.
According to Akahueze, Nigeria’s gross domestic product to debt ratio is among the lowest in the world. Although there was considerable enthusiasm at the magnitude of the FG budget for 2023, the total budget of all the governments in the nation is just about N30 trillion. In terms of a percentage of GDP, that is under 15%.
“Even in the continent of Africa, the expenditure ratio is over 20%. About 30% of the population comes from South Africa, and 40% is from Morocco. Furthermore, at 15%, that is too little for our requirements. The severe struggle for the scarce resources is caused by this.”
However, he said that Nigeria has limited borrowing capacity due to her inability to generate enough income to pay off the amount of debt.
Nigeria shouldn’t be regarded as having an oil-rich economy, according to Akabueze, who argued that oil-rich countries include Saudi Arabia, which has 34 million people and produces 10 million barrels of oil per day. Kuwait, which has 3 million people, produces 3 million barrels per day. Nigeria has 200 million people but only produces 1.9 million barrels per day.
Nigeria is not a wealthy nation because it produces oil, but Akabueze made the argument that it may one day be. He thus asserted that Nigeria’s development plan is inadequate and incapable of being put into action.
The DG emphasized that early 1990s development plans existed for Nigeria. “However, you may counter that it hasn’t achieved the required level of success. Budgets for each year are essentially the backbone of development plans. They provide attainable goals for the next 12 months. A budget that deviates from the development strategy is poor, he claimed.
