Economists and experts have expressed worry over the utilization of Nigeria’s growing debt profile. In separate telephone interviews some experts who reacted to the worries expressed by the United States over Nigeria and Africa’s growing debt profiles resulting from massive Chinese loans, said Nigeria should be worried over the efficiency of the borrowings rather than the size.
The News Agency of Nigeria had reported that the US Department of State had in a background briefing on the visit of the Secretary of State, Rex Tillerson, to the continent expressed worry that African countries were regressing to debt after debt forgiveness, which countries like Nigeria benefitted from between 2004 and 2006.
A former President of the Nigerian Economic Society and currently Executive Director, African Centre for Shared Development Capacity Building, Prof. Olu Ajakaiye, said what was important was the efficiency of the borrowing rather than the size of the debt. Ajakaiye stated that Nigerians should begin to question the efficiency of borrowing by the Government, whether it was the present Government or former administrations.
He said the purpose of the country’s current borrowings was good on paper but regretted that the budgetary process had been frustrating the roll out of infrastructure for which the Government had been taking loans. Ajakaiye also faulted the current strategy of the Federal Government to borrow from foreign sources in order to liquidate local debts.
Similarly, a development economist, Odilim Enwegbara, stated that although Nigeria’s debt to Gross Domestic Product ratio was better than those of peer African countries, the country’s problem was in the utilization of the proceeds of debt.
Enwegbara said ordinarily, the United States should not be the one to talk to Nigeria on the debt profile because of its high indebtedness, but added that the Nation had been profligate in the management of its debt resources.