It proposes a 10-Point action plan under an integrated
strategy for revenue optimisation, expenditure efficiency and debt management.
This was unfolded in Abuja on Thursday when the Debt
Management Roundtable (DMR), an initiative of the Nigerian Economic Summit
Group (NESG) and Open Society Initiative for West Africa (OSIWA), formally
presented its full report on debt management and sustainability in ECOWAS to
Nigeria’s Debt Management Office (DMO) for possible adoption and implementation.
In her keynote address, The Director-General, DMO, 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.
In a statement by NESG CEO, ‘Laoye Jaiyeola, he 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 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 behoves 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 DMR Chairman, Taiwo Oyedele, identified corruption in
public spending, insecurity, geopolitical challenges, resource overdependency,
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.”
The presentation, held at the DMO in Abuja, was graced by
stakeholders from Nigeria’s public and private sectors, including Dr Abel
Essien, ECOWAS Commission; Paul Adeyeye, OSIWA and Zainab Mangga, the
International Monetary Fund (IMF) Country Office.
Inaugurated in March 2021, the DMR was tasked with providing
viable alternatives and recommendations that government can apply to ensure the
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 spillover 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.
It proposes “a 10-Point action plan under an integrated
strategy for revenue optimisation, expenditure efficiency and debt management”.
Concerns around debt sustainability have expectedly been
heightened, and 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, and 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 International Monetary Fund (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.”
NESG recommends integrated debt, revenue, expenditure
strategies to curb rising debt burden.
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