Business Feature ; National Domestic Debts ReviewContent Creator
When it applies to business or corporate affairs, it is sure thing to come across the term Borrowing which in its technicality is LOANS.
Businesses take loans for a couple of reasons including expansion, investments, high purchases or in real estate etc. Countries take loans to finance development and such is factored into a tangible project that will boost revenue generation. The aim is to take planned and strategic approach towards loans. Now one may ask, Is Nigeria’s National Debts justifiable?
However, one form of loan that has been controversially popular in the years by is Nigeria’s International dealings as related to loans and budget with international society; Chinese government especially. Nigeria’s borrowings have majorly been as a result of revenues falling short on expenditures. Not just Nigeria, many governments in the world have had a share in the loans saga. However, Nigeria’s continuous loans from China has only resulted to long outstanding loans, having ripple effects on the national economy. This has triggered warnings from world Bank and IMF on the consequences of such debts. One true fact is that loans must be repaid; the question is, how long?
More so, speaking of how long, the national borrowings have been in practice
for years now. The chart illustration above presents Nigeria’s borrowing from 2015 to Dec 2020 culled from DMO (Debts Management Office) statistics. The concern however is on the significant raise on the amount that has been borrowed compared to previous loans. The current debt stands at 32.9 Trillion Naira as at Dec,2020. Though there is an option to service loans set aside in the national budget, it’s never enough. Concerns are set on the “why” and” when” such debts will be totally cleared from the books. Some Nigerian economist have referred to it as a burden because moneys meant for human development are fixated on servicing debts.
Some economists agree that Loans are arguably good for financing development. However, borrowing perpetually is an impending danger on future economy. It now raises concerns into the feasibility of such developmental projects in relation to compounding debts. We can’t speak enough of the impact on Business economy, with the Naira loosing value in chains. Meanwhile, the debts look to be growing from here 32.9 trillion Naira and counting.