Back in the 70s when Nigeria had an enviable economic boom, nobody thought we’ll be going round some years later, looking for where to borrow money. Or even imagine that we’ll be buried in loans amid growing poverty.
We had so much money that one of the administrators of the day uttered the popular phrase that we’re all aware of: ‘Nigeria has too much money, we don’t even know what to do with it’. That’s true, we were the proverbial money-miss-road. We couldn’t build and secure the future with the enormous amount of revenue we were generating from our deep oil wells.
But beginning with the economic downturn of the 80s, the cookie started to crumble, and before long we were back to the bottom. The money stopped flowing, the nation stalled and as expected we began borrowing money to stay afloat.
Well, the rivers have overflown now and dooms day analysts have been raising alarm that Nigeria is drowning in loans. The outcry is not far-fetched because Nigeria’s debt profile has skyrocketed in the past few years. It was revealed earlier this week by the Debt Management Office that the country’s debt increased by 560 billion Naira within the past three months.
Although experts have insisted that the loans are not yet a burden on the country, but so many people fear that the government will keep piling up the debt until it becomes unbearable. In fact the last audit of Nigeria’s debts placed the figure at 24.9 trillion Naira.
The total debt to GDP ratio is now 19.03% which is within the 25% debt limit for the country. But measuring the distance between where we are and the danger zone, it is obvious that the water has definitely passed our chest. Who knows where it’s going to reach by the time this year is over.
It is safe to say that if Nigeria does not do anything to curb the rising rate of borrowing, the country might indeed drown in loans.
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