The Centre for the Study of the Economies of Africa (CSEA), a leading economic research organization with special focus on African economies’ trends, has called on the three tiers of government to embrace fiscal efficiency and revving up their revenue generation drives in order to reduce borrowing in public finance in the country.
Using the Debt Management Office’s (DMO’s) latest data on Nigeria’s debt stock which increased by 14 percent from N31.01 trillion in Q2, 2020 to N35.47 trillion in Q2, 2021 with domestic debt accounting for the majority of total debt, estimated at 61 percent of total debt in Q2 2021, to justify its position, the research firm projected that external debt was anticipated to increase significantly as the government raised a total of US$4 billion in Euro bonds in what is being described as the largest financial trade from Africa.
The CSEA researchers , in the firm’s latest Nigeria Economic Update Issue 40 ,noted that the rise in debt was driven by the rising fiscal deficit as the government is faced with revenue shortfalls amid rising government expenses.
The experts stated: “Specifically, the 2021 budgeted expenditure is N14.44 trillion with an estimated budget deficit of N5.49 trillion.
“Given the rising debt, there is the need to strengthen the capacity of revenue generating agencies to boost domestic revenue mobilization, which in turn, would expand the fiscal space.
“More specifically, investments in the digitization of revenue collection channels should be prioritized to reduce revenue leakages and ensure that available revenue sources are optimized.
“Furthermore, civil society organizations should monitor the utilization of the new loans in order to promote transparency and accountability”, they added.
