Rewane Urges FG to Restructure Nigeria’s Debt

Nume Ekeghe

The Managing Director, and Chief Executive Officer of the Financial Derivatives Company (FDC), Mr. Bismarck Rewane has advised the federal government to restructure the country’s debt and seek better loan repayment terms.

Rewane said this at the FDC economic forum with the theme: “Corporate resilience: Economic recovery against unforeseen pandemics,” held Lagos yesterday.

The Debt Management Office (DMO) had put Nigeria’s total debt at N42.84, trillion with the World Bank predicting that debt service to revenue would increase to 102.3 per cent by the end of 2022.

However, Rewane said: “First of all, restructure your debt, reschedule it and seek better terms. In any case, you have to be honest with yourself and use the money for the purposes you borrow. You cannot borrow to steal.”

 Speaking on the global financial crisis and its spillover effect on Nigeria, he expressed optimism that Nigeria was on the path towards growth. 

He said: “Nigeria has had some crises, more crises than the global trend. But in some cases, Nigeria has also benefited from windfalls. This crisis now where Saudi Arabia, Angola, and Russia are making a windfall and gains from it. But I think that we didn’t take advantage of it because we had our own domestic vandalism and all of that, but once we get a hold of this, which is going to come in next year, then you will see that our recovery is going to be much more dynamic than we believe.

“So, again, I’m highly optimistic about the fact that things will change and change for the better.”

He advised the government to be, “more efficient in your collection of taxes, but also you have to reduce the number of taxes. The burden of tax itself is a problem.

“So, I also believe that the lower the tax rate, the more compliant people are going to be, therefore, we should go more on the efficiency of tax, and again, more credible leadership and policies, that if we can be honest with people, then people are more willing to pay taxes than if we are dishonest with the people.”

“Trust deficits exists and it is an accumulative pattern of bad behavior that has led to where we are.  And I’m talking about the last 60 to 70 years so it’s not just now.

“So, it has become the perverse nature of leadership and followership. We have come to accept falsehood as part of the DNA of Nigeria, so we’ve got to change that and it has to start with some very ruthless and drastic steps,” he added.

Commenting also on Nigeria’s debt, the General Manager Strategy and Innovation, MTN, Mr. Babalola Oyeleye said: “The cost of governance in Nigeria is one of our fundamental issues. We are looking at a deficit in the next three to four years, so our interest expenses as a nation and our debt are growing exponentially compared to our revenue.

“One of the things we need to look at as a country is why we are spending so much money. And that money is not necessarily on capital projects and infrastructure, it is being spent on operating expenses and it is a substantial problem for the country.

“It may not be a problem we would see now, but it is a problem that may manifest in another five to ten years.  The debt level is out of this world.”