Abraham Nwankwo, director general, Debt Management Office (DMO), has said that the nation’s debt-to-Gross Domestic Product (GDP) ratio has fallen from 22 percent to 13 percent.
Fielding questions from newsmen at MicCom Golf Hotel and Resorts, Ada, Osun State, during a three-day retreat for members of the House Committee on Aids, Loans and Debt Management, Nwankwo, said, “Our debt is sustainable because GDP is much lower now. However, in spite of that, government will continue to be very prudent, conservative in its spending.”
According to him, “From my submission, I told House of Representatives’ Committee on Aids, Loans and Debt Management that the GDP ratio is about 12 percent and this includes both external and domestic debt for both the federal and state governments.
I emphasised in my discussion with the House of Representatives’ Committee on Aids, Loans and Debt Management that focus should be on having more revenue to service debt and therefore even based on debasing of Nigeria GDP, our debt GDP ratio has fallen from about 22 percent to less than 13 percent. This does not mean that we are in a position to borrow more, because GDP has improved dramatically.
“However, the poor attitude of Nigerians to paying their tax as many enterprises in the country -small and medium scale businesses that should be in the tax bracket – are not in the tax bracket and because many Nigerians who should pay tax are not willing to pay their taxes, the tax revenue GDP ratio is low and it is from revenue that government is able to service the debt or borrows. Therefore, until our tax revenue to GDP ratio improves significantly, government will continue to be conservative in borrowing.”
Meanwhile, contrary to persistent claims that Osun’s government under Governor Rauf Aregbesola is indebted to the tune of over N350 billion, the Debt Management Office (DMO) has said Osun’s debt profile is a very sustainable one which is healthy for its economic growth.
Nwankwo said that the state is one of the best states in the federation with public debt management, describing the claims to heavy debt burden in Osun as mere propaganda and hoax.
According to him, Osun State status is very sustainable.
