ABUJA — President Muhammadu Buhari has blamed Nigeria’s rising debt profile on economic recessions in the country.
According to him, the country’s debt is growing consistently because the federal government had to spend its way out of recessions.
Buhari disclosed this while addressing a joint session of the national assembly on Thursday.
He stated that the economy would not have recovered without the government’s expenditure that was funded by debt.
“As you are aware, we have witnessed two economic recessions within the period of this administration. In both cases, we had to spend our way out of recession, which necessitated a resort to growing the public debt.
“It is unlikely that our recovery from each of the two recessions would have grown as fast without the sustained government expenditure funded by debt.
“Our target over the medium term is to grow our Revenue-to-GDP ratio from about 8 percent currently to 15 percent by 2025. At that level of revenues, the Debt-Service-to-Revenue ratio will cease to be worrying,” the president said.
“Put simply, we do not have a debt sustainability problem, but a revenue challenge which we are determined to tackle to ensure our debts remain sustainable.
“Very importantly, we have endeavoured to use the loans to finance critical development projects and programmes aimed at improving our economic environment and ensuring effective delivery of public services to our people,” Buhari said.
In 2015-2021, Nigeria’s economy has slipped into recession twice.
The Debt Management Office (DMO) had estimated Nigeria’s total public debt (federal and state governments) to hit N35.46 trillion at the end of the second quarter of this year.
This represents an increase of N2.36 trillion compared to the N33.10 trillion recorded in March 2021.
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