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UPDATES: SEE HOW GUYS ARE USING LATEST iPHONE 16 Pro Max TO SCAN LADIES AND GET THEIR N4KED BODY. SEE HOW THEY ARE DOING THE Federal Government is wrongly borrowing to pay interest said the chief executive officer (CEO) of Economic Associates (EA), Ayo Teriba. ...Tap To Read The Full Story Here | ..Tap To Read The Full Story Here...
The renowned economist made the point on Arise TV programme, ‘Morning Show’ on Tuesday, December 24, while commenting on President Bola Tinubu’s statement that there was nothing wrong with borrowing.
Tinubu, during his first presidential media chat on Monday, December 23, defended borrowing money from international financial institutions to finance the budget.
He said specifically that “borrowing is not criminal” as the country faces serious infrastructural challenges.
The President has presented a 2025 budget size of N47.9 trillion with N13.08 trillion deficit and N15.81 trillion in debt servicing.
As of June, the Debt Management Office (DMO) put Nigeria’s domestic and external debts at N121.67 trillion, equivalent to $91.46 billion.
In November, the National Assembly passed Tinubu’s request to obtain a $2.2 billion external loan, equivalent to N1.77 trillion.
Many Nigerians are critical of the Tinubu-led administration’s appetite for taking more loans while struggling to pay the country’s debts.
At the media chat on Monday, the President asserted that his administration was borrowing to develop the nation’s infrastructure.
He admitted previous governments did not adequately utilise the loans obtained from foreign institutions.
“Yes, we have headed the wrong road in the past. I don’t want to look at that. I want to think about prosperity. I want to think about tomorrow,” he said.
However, in assessing government penchants for borrowing, Teriba expressed that the government is merely borrowing to pay interest.
“So let’s just understand that you are borrowing just to pay interest,” he said.
He believes nobody should put the country and Nigerians in that kind of situation.
He stressed that in the 2025 budget, the interest payments (N15.81 trillion) are going to be higher than the deficit (N13.08 trillion).
He urged the finance ministry to raise Nigeria’s debt quality as that is a key performance indicator and not to celebrate that sovereign bonds were over-subscribed.
Teriba further expressed concern that the Nigerian government has never issued an investment-grade bond.
“So let’s get that clear. We shouldn’t go on a roadshow to issue junk bonds again. We should start looking at assets that we can securitise. We should stop securitising income so that everybody can save.UPDATES: SEE HOW GUYS ARE USING LATEST iPHONE 16 Pro Max TO SCAN LADIES AND GET THEIR N4KED BODY. SEE HOW THEY ARE DOING
“I was worried yesterday that during the interview the inability of the NNPC to make expected contributions to the federal government,” he maintained.
Teriba, on the one hand, explained that there are right and wrong ways of borrowing and also efficient ways of borrowing and on the other hand, he said there are inefficient ways of borrowing.
He said, “The foremost issue is the quality of the debt instruments that you issue.
“There are some countries of comparable size of the economy, borrow more heavily than we do, but they issue higher grade bonds, investment grade bonds.”
The renowned economist also pointed out that Nigeria borrows at some of the highest rates in the world, whether domestically or abroad.
“So, we shouldn’t create the impression that it’s about whether you should borrow or not, Teriba said.
He said the part of the crisis at hand is that the budget will go on interest payments, stressing that Nigeria borrows extremely inefficiently when there are more efficient ways of raising liability.
He said if you look at your balance sheet, you have debt as a possibility, but you also have equity as a possibility.
He noted that the Nigerian government has and supports a very thriving equities market but has no issue in the market, and the same for state-owned companies.
“At home, or anywhere else in the world, we go every time to Europe, we don’t issue equity. We only issue debt,” he lamented.UPDATES: SEE HOW GUYS ARE USING LATEST iPHONE 16 Pro Max TO SCAN LADIES AND GET THEIR N4KED BODY. SEE HOW THEY ARE DOING
The likes of Saudi Arabia, United Arab Emirates (UAE) and Malaysia raise money more heavily than we do by issuing equity-like bonds, Teriba added...Tap To Read The Full Story Here.
