By Stellamaries Amuwa, Abuja
The Civil Society Legislative Advocacy Centre (CISLAC) and Tax Justice and Governance Platform, have urged the federal government to reduce its dependency on international and especially private creditor borrowings.
The Executive Director of Civil Society Legislative Advocacy Centre (CISLAC), Auwal Ibrahim Musa (Rafsanjani) made this known during a news conference organised by the two bodies.
He said borrowing account for about 60 per cent of the annual debt servicing cost and prioritises concessional loans, in adherence to legal stipulations.
According to Rafsanjani, Nigeria is facing a critical economic challenge, marked by a substantial allocation of its revenue towards debt servicing.
As of December 2022, 80 per cent of Nigeria’s total revenue was dedicated to that purpose.
“The new government on its part has commended itself for allocating more funding to social services in its 2024 budget.
“However, the country will spend six times more on servicing debts than on building new schools and hospitals in 2024.
“In its N28 trillion 2024 budget, the pattern of bloated recurrent spending new borrowings and unsustainable debt servicing costs still persist,’’ he stated.
Rafsanjani added that debt service is allotted N8.25 trillion and the president ambitiously projects debt servicing at 45 per cent of total income while it currently sits at 98per cent , as the World Bank projects 160 per cent by 2027.
Meanwhile, Nancy Humphrey Lead Director, Neighbourhood Initiative for Women Advancement and member of the Tax Justice platform noted that to mitigate this situation, the National Assembly should revise legal and institutional frameworks related to debt management, emphasising transparency and accountability.
“This includes empowering bodies like the Fiscal Responsibility Commission and the Debt Management Office to enforce laws and regulations”.
Similarly, Executive-Director, Extractive 360, Juliet Ukanwosu
said the Ministry of Finance, Budget, National Planning and related agencies, should enhance revenue generation by expanding the tax net, improving tax compliance and revising tax incentives.
“Review all the existing tax expenditures and criteria for such benefit including but not limited to Pioneer status, contribution to economy.
“Remove the power to grant tax expenditures from the Minister of Finance or the Executive and only place a duty on the Executive to document the recommendations, proposals and justification for tax expenditure subject to the approval of the legislature.
“Tax expenditures should not exceed 10 per cent of projected revenue every year or within the medium term.’’
