The Nigerian Apex Bank, Central Bank of Nigeria (CBN), has on Friday delivered a warning to the Federal Government about the rising debt profile of the country.
The Governor of the Central Bank of Nigeria, Dr Godwin Emefiele, while briefing journalists after the CBN’s Monetary Policy Committee (MPC) meeting, called for restrain policies to be effected in areas of need to help curb the adverse effects of oil price decline on the economy.
The Debt Management Office (DMO), has last Friday, through Patience Oniha its Director General, said that the country’s public debt stood at N26.215 trillion at Q3 2019.
Emefiele stated that after analysis and observation, the resulting data states that there will be room for economic expansion in 2020 with the CBN putting its growth projection at 2.35% compared to the 2.1% set by the World Bank and the 2.5% forecast by the International Monetary Fund (IMF).
Mr Emefiele also expressed worry that the economy was facing a number of threats such as insecurity, absence of fiscal buffers, escalating debt profile, dilapidated infrastructure, and weak private sector investment.
”The MPC, however, cautioned that public debt was rising faster than both domestic and external revenue, noting the need to tread cautiously in interpreting the debt to GDP ratio.
“The committee also noted the rising burden of debt services and urged the fiscal authorities to strongly consider building buffers by not sharing all the proceeds from the Federation Account at the monthly Federation Account Allocation Committee meetings to avert a macroeconomic downturn, in the event of an oil price shock.
“It urged government to gradually reduce reliance on oil receipts and focus on revenue diversification through reforms of the tax system.”