Dr Austine Nwaeze, lecturer, Economics department, Pan Atlantic University, has said reducing the cost of governance by all the tiers of government was the panacea for tackling revenue to debt ratio.
Nwaeze told the News Agency of Nigeria (NAN) in Lagos on Tuesday that the three tiers of government must cut down cost of governance to shore up revenue.
The lecturer said the funds earmarked for recurrent expenditure in the annual budget was unsustainable considering the current economic realities.
“It is worrisome that the revenue expended on debt servicing is high, particularly as there are little or no meaningful projects to show for foreign and domestic debts.
“Both the foreign and domestic debts have consistently being on the rise lately. Hence the federal government voted huge funds in the budget for debt servicing, crowding out funds for infrastructural development.
“We must begin to reduce white elephant projects, in order to manage our revenue to debt ratio, in the country,” said the don.
He noted that officials of the various tiers of government must begin to think more critically on how to solve the country’s developmental challenges.
“Our political office holders must be problems solvers, and not just throwing money at every challenge in the economy.
“As allocating scarce resources to address every challenge without considering other options, will lead to incurring debt for the future generation,” he said.
NAN reports that the International Monetary Fund (IMF) asked the Federal Government to take steps to address Nigeria’s rising debt service/revenue ratio.
The IMF Senior Resident Representative in Nigeria, Mr. Amine Mati, who spoke at the public presentation of the 2018 “Regional Economic Outlook: Sub-Sahara Africa, Capital Flows and the Future of Work,” in Abuja.
He said, “Nigeria’s Debt /GDP ratio at between 20 and 25 per cent is quite low but debt servicing which takes about 50 per cent of revenue is certainly high.
He said the regional average was worse than the Nigerian scenario, with Debt/GDP across Sub-Sahara Africa ranging between 35 and 57 in the past five years.