Private Sector Operators Propose 10-Point Action Plan to Boost Nigeria’s Fiscal Position

Ndubuisi Francis in Abuja

The Nigeria Economic Summit Group (NESG), a private sector-led think-tank and policy advocacy group, has proposed a ten-point action plan under an integrated strategy for revenue optimisation, expenditure efficiency and public debt management.

The action plan was contained in a report submitted in Abuja, yesterday, to the Debt Management Office (DMO) under the auspices of Debt Management Roundtable (DMR), an initiative of the NESG and Open Society Initiative for West Africa (OSIWA).

The NESG chief executive, ‘Laoye Jaiyeola in a statement highlighted the depth of research and sub-regional collaboration involved in the production of the report, as well as its significance for sustainable debt management across the West Africa sub- region, if implemented.

He said: “At the NESG, our mission is an open, inclusive, sustainable and globally competitive economy. We champion sustainable debt management because unsustainable public debt accumulation is inimical to economic growth, not only in Nigeria but ECOWAS as a whole.

“Nigeria is a focal point for debt sustainability, considering that the country accounts for 50 per cent and 67 per cent of the region’s total debt and GDP respectively. This behooves us to adopt more sustainable strategies to create the required fiscal space for national development, with positive knock-on effects in other ECOWAS nations.”

The presentation was graced by stakeholders from Nigeria’s public and private sectors, including Dr. Abel Essien of the ECOWAS Commission; Paul Adeyeye, OSIWA and Zainab Mangga, the International Monetary Fund (IMF) Country Office, among others.

In her keynote address, The Director-General, DMO, Ms. Patience Oniha, said: “The timing of the launch of the report could not have been more appropriate with the global debt levels already rising pre-COVID-19 and still growing since the COVID-19 pandemic started in the year 2020.

“Concerns around debt sustainability have expectedly been heightened. According to the World Bank’s World Economic Outlook, ‘Globally, sovereign debt grew from 49.1 per cent of GDP in 2014 to 57.9 per cent in 2019, and in sub-Saharan Africa, from 35.1 per cent of GDP in 2014 to 55.4 per cent in 2019.’ The respective figures for 2021 were 66.7 per cent and 60.3 per cent.

“The indications are that the trend will continue as the economic consequences of COVID-19 may linger for a longer period, coupled with the increased economic pressures in the form of rising inflation from higher food and energy prices caused by the Russia-Ukraine war.

“The IMF projects in its World Economic Outlook for April 2022 that the average Debt to GDP Ratio in West Africa is expected to rise to 67.2 per cent in 2022 from 56.4 per cent in 2019.”

In his remarks, the DMR Chairman, Taiwo Oyedele, identified corruption in public spending, insecurity, geopolitical challenges, resource over dependency, and a shallow tax base as some major drivers of unsustainable debt.
He added: “The DMR report is holistic and includes workable recommendations that, if adopted, can prevent West Africa from getting into a debt trap. Debt in and of itself is not a bad thing. It is what we do with the debt that really counts.

“So how can we begin to apply the resources that we make – whether internally generated or money borrowed – in an efficient manner to promote productivity and prosperity for our people.
” The report provides answers that should help steer Nigeria and other ECOWAS countries towards debt sustainability.”

Inaugurated in March 2021, the DMR was tasked with providing viable alternatives and recommendations that government can apply to ensure public debt is sustainably managed. The urgency of the initiative was in response to growing concerns over rising debt profile in major countries, including Nigeria and possible spill-over effects to other ECOWAS economies if left unchecked.

The report provides some background on the ECOWAS fiscal landscape and public debt portfolio, including several policy recommendations for debt sustainability and key performance indicators.