The President, Major General Muhammadu Buhari (retd.), faces significant criticism from the Civil Society and Legislative Advocacy Centre (CISLAC) regarding the government’s handling of Nigeria’s escalating debt crisis. Amidst pervasive insecurity, soaring food prices, widespread poverty, and rising inflation, CISLAC has raised alarms about the administration’s apparent indifference towards the country’s crippling debt situation. The organization highlighted that, barely two decades after exiting the Paris Club Debt, Nigeria has fallen deeper into a debilitating debt trap due to the current administration’s borrowing spree.
During a press conference focused on the role of private creditors in Nigeria’s debt crisis and its human costs, CISLAC’s executive director, Auwal Ibrahim Musa Rafsanjani, emphasized that approximately 90 percent of government revenue is now allocated to debt servicing, severely undermining development projects. Expressing concern over the lack of attention given to the debt crisis, CISLAC, in collaboration with Christian Aid Nigeria, has initiated a year-long research project aimed at identifying solutions to the debt predicament. Rafsanjani noted that private creditors have introduced a new dimension to Nigeria’s debt crisis, raising concerns about the government’s fiscal strength and its capacity to address socio-economic emergencies.
Rafsanjani pointed out that Nigeria is already ensnared in another debt trap, as evidenced by records from national and international financial institutions. According to the Debt Management Office, Nigeria’s total public debt stock reached N42.84 trillion as of June 30, 2022. He highlighted that the cost of servicing this debt exceeds the government’s revenue, indicating significant economic dangers ahead. The implications of the rising debt stock are alarming, with total external debts amounting to approximately $40 billion, of which $15.9 billion is attributed to private credit, representing 39.8 percent of the total external debt stock. Euro bonds constitute the majority of commercial loans, totaling $15.62 billion.
The director criticized the lack of transparency in lending and borrowing practices, as well as the inability to track funds. He attributed much of the predicament to the indifference of lawmakers who approve loan requests without considering the interests of the Nigerian populace. Rafsanjani expressed deep concern over the absence of rigorous scrutiny by legislators when granting loan approvals, which should be based on public interest as mandated by the Fiscal Responsibility Act. He urged Nigerian legislators to prioritize this clause when considering any further borrowing requests from the president.
CISLAC, with support from Christian Aid, is committed to enhancing the urgency with which the government addresses the debt crisis. Rafsanjani revealed that the organization has launched a research initiative aimed at revealing and challenging the role of private creditors in hindering recovery efforts. This research seeks to highlight the Nigerian context and dimensions of indebtedness to private creditors, providing policy options and deliberate efforts to address the issue. The ultimate goal is to contribute to an international financial architecture that supports human rights and climate action within an economic framework centered on care.
CISLAC calls upon all state and non-state actors to take collective action to address the debt crisis proactively, as Nigeria approaches a fiscal cliff. This is crucial for the growing population of impoverished Nigerians whose lives are adversely affected by the ongoing crisis.
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