ANALYSIS: Nigeria and the Kiss of Debt (Part 1)
; Nigeria is the giant of Africa. On the contrary, an average statistics of 2012-19, among some selected high-debt African countries which include Angola, Cameroon, Ghana, South Africa, Cote d’Iviore and Rwanda showed that Nigeria accounted for 43 per cent of the total government debt owed by these countries, followed by Angola with 22 per cent. In terms of economic growth rate, Nigeria is ranked 5th amid the selected countries.
Total Debts Accumulated by Government between 1990 and 2018. [CREDIT: Source: Author’s computation using CBN Statistical Bulletin Data, 2019]It can be observed from the above trend that there has been a consistent and aggressive rise in country’s debts profile with no simultaneous and consistent increase in the economic growth and the standard of living of the people of the economy .
Furthermore, a need to review the debt servicing and trade balance of Nigeria can also be placed on check. According to IMF, existing debt and accumulated interest can be sustained primarily by budget surpluses. In other words, debts can be sufficiently sustained when a nation runs on a surplus budget. On the contrary, Nigeria runs a deficit budget. For example, Nigeria runs a deficit budget of N1.92 trillion and N2.18 trillion in 2019 and 2020 respectively.
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