President Tinubu

Experts in the financial  services industry urged the Federal Government to explore Public Private Partnership (PPP) option in addressing the country’s infrastructural challenges. They also urged government to be cautious on new borrowings in order not to incur more debts.

According to a former Executive Secretary, Chartered Institute of Bankers of Nigeria (CIBN), Dr Uju Ogubunka,  the Federal Government could be innovative in fixing developmental projects without incurring more debts. “The government should harness the enormous prospects of the PPP in tackling infrastructural challenges impeding our economic growth. This model is one of the solutions in tackling our infrastructural dearth, due to our poor fiscal revenue currently,” Ogubunka said.

He noted that the three tiers of government need to reduce the increasing cost of governance in order to free funds for infrastructural purpose. “Adopting this cost saving measures is imperative so as government can reallocate the resources to other productive needs of the society. This approach will stop wastages in governance and reduce the spate of being in debt from borrowings from international lenders,” Ogubunka said. Also, the President Standard Shareholders Association of Nigeria, Mr Godwin Anono, said the government should reduce the rate of borrowings because the country’s debt stock was assuming a worrisome dimension. “The three tiers of government should reduce borrowings and be innovative in improving Internal Generated Revenue. As every state in the country has enormous revenue potential that could be harnessed for our common good,” Anono said. He noted that the Federal Government could tackle its infrastructural headwinds without more borrowings from international lenders.

“The government could harness the Infrastructural Company of Nigeria which is saddled with the appropriate template for private sector funding for public infrastructure. This will ultimately catalise growth and provide the necessary infrastructure that will unlock capacity to appropriate our natural resources to enhance the lives of the people,” Anono said. Also, the founder of the Independent Shareholders Association of Nigeria, Mr Sunny Nwosu, said the Federal Government should muster the political will to sell some state owned assets to enhance revenues. “They are too many redundant national assets which are increasing government overheads with no economic viability currently. The government should have a committee where they will be evaluated and concessioned and others sold outrightly,” Nwosu said. This, he said, would boost the country’s revenues and ameliorate the urge for more debts. Nigeria’s total public debt rose by fiat to N82 trillion following the unification of the Naira. It was N73 trillion before the unification. The Central Bank of Nigeria issued a press release titled Operational Changes to the Foreign Exchange Market, signalling a unification of the multiple exchange rates.

However, the implementation of the scheme which saw the exchange rate first depreciate to N662/$1 attracted several consequences for the economy one of which includes the automatic increase of the public debt. Before now, the nation’s public debt was quoted at N448.50/$1 by the Debt Management Office as the official exchange rate but this has now been depreciated to N662/$1. This means the total public debt increases from an estimated N79 trillion to N82 trillion. The increase is due to the conversion of the dollar portion of the debt which is estimated at about $41.6 billion. When adjusted for the most recent exchange rate it converts to N27.6 trillion