Monday, 24 September 2018

"Nigeria Is On Huge Debt that's above our control" - Okonjo-Iweala expresses Worries, Calls for Mighty Intervention

The former Minister of Finance, Ngozi Okonjo-Iweala, has expressed worries over the rising debt profile of African countries including Nigeria.

The former minister, who made this known in an article published on Financial Times, said the concern about the continent’s rising debt profile was real even though it was important for countries in the continent to leverage Chinese loans to build infrastructure.

“The concern about Africa’s rising debt profile is real. According to the IMF, sub-Saharan Africa’s debt to GDP ratio has risen from 26.3 per cent in 2009 to 48.1 per cent today.

“This ratio is far higher and in dangerous territory for a handful of countries. Whilst Chinese debt may not be the biggest contributor to this, African countries need to seek a good balance of concessional loans, grants and foreign direct investment, individually and collectively to sustain their development. China is open to this.

“During my time as Finance Minister of Nigeria (2011-2015), China worked with us to get a balanced package of assistance that has helped build the light rail system in Abuja and four new airport terminals in Lagos, Port Harcourt, Kano and Abuja, among other projects.

“Directing Chinese assistance to build sustainable regional infrastructure projects that can unlock the continent’s vast potential is key,” she wrote.

Two weeks ago, the Deputy Secretary-General of the United Nations, Amina Mohammed, had expressed similar worries over the rising level of Nigeria’s debt.

According to Mohammed, the country is now back to worrying levels of debt after the administration of former President Olusegun Obasanjo got Nigeria out of debt through Okonjo-Iweala.

But it would be recalled that the Debt Management Office (DMO) had said Nigerians have no reason to panic over Federal Government’s borrowing from China, saying there is no risk of default on the loans because of the country’s “sound debt management practices.”

According to the debt office, it was important for the government to raise capital from several domestic and external sources to finance capital projects, in order to promote economic growth and development, as well as, job creation.

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