Nigeria President Muhammadu Buhari, has revealed to Nigerians that the reason for the country’s rising debt was due to the fact that the federal government spent its way out of recession. ayokinews.com reports
Speaking during a joint session of the national assembly on Thursday, President Buhari noted that the country wouldn’t have made a fast recovery from recession without the government’s expenditure which was solely funded by with foreign loans.
In his words: “As you are aware, we have witnessed two economic recessions within the period of this administration. In both cases, we had to spend our way out of recession, which necessitated a resort to growing the public debt.”
“It is unlikely that our recovery from each of the two recessions would have grown as fast without the sustained government expenditure funded by debt.”
Speaking further, President Muhammadu Buhari, stated that Nigeria does not have any problem with debt sustainability but the country has a problem with revenue generation.
“Our target over the medium term is to grow our Revenue-to-GDP ratio from about 8 percent currently to 15 percent by 2025. At that level of revenues, the Debt-Service-to-Revenue ratio will cease to be worrying,” the president said.
“Put simply, we do not have a debt sustainability problem, but a revenue challenge which we are determined to tackle to ensure our debts remain sustainable.
“Very importantly, we have endeavored to use the loans to finance critical development projects and programmes aimed at improving our economic environment and ensuring effective delivery of public services to our people.”