Nigeria’s increasing external debt is inimical to the economy – expert

Nigeria’s external debt is currently put at $6.6 billion.

A former President of the Finance Houses Association of Nigeria (FHAN), Samuel Nzekwe, on Tuesday said that the rising external debt of Nigeria could lead to further depreciation of the naira.

Mr. Nzekwe told the News Agency of Nigeria in Lagos that the rising external debt stock could adversely affect the general economy.

The Debt Management Office (DMO) has put the country’s external debt stock at $6.6 billion.

A large chunk of the external debt, which hitherto averaged 30 billion dollars, was forgiven by the creditors during the tenure of President Olusegun Obasanjo. At the height of the external debt crisis in the 1980’s, Nigeria was spending about 1.5 billion dollars annually to service the debts.

Mr. Nzekwe queried the rationale for the new loans in spite of the huge revenue accruing to the government. He said that most of the loans would end up in private pockets.

“It will be good if the loans are being used for capital projects, but that is not the case,” he said.

He said that part of the external reserves could even be used for the capital projects instead of borrowing. He expressed disappointment at the deplorable conditions of infrastructure in the country and advised government to urgently fix them.

Mr. Nzekwe said that the government should embark on intensive development of infrastructure for the nation to achieve sustainable economic growth.