Stakeholders Disagree On Govt's Debt Management Policy - Discordant voices have continued to trail federal government's monetary policy as it relates to external borrowing with experts in financial matters been sharply divided on the virility of policy. While some top financial strategists still favour government's resort to borrowing to finance the bulk of its projects especially as it concern infrastructural development, there are groups which are strongly opposed to it just as they accuse any strategy which resorts to borrowing as amounting to mortgaging future Nigeria. Those who are opposed to external borrowing have urged the Federal government to source for funds internally to reduce the nation's rising external debt stock.

They have argued that persistent good debt management strategies and prudential borrowing would bail the country out of the debt burden in no distant time.

Dr Mashudd Fashola, a Senior Lecturer in Economics at the University of Lagos (UNILAG), suggested that government should pay due attention to debt servicing and if possible, liquidate all outstanding external debts.

Fashola said that although external borrowing had contributed positively to the growth of the economy up to a point, external loans had begun to have diminishing impact on the economy.

He advised the government to seek external loans only for very high priority projects which must have been well-appraised.

Fashola said that those projects must be able to re-pay the loans and should have direct positive impact on the economy.

But Chief Kola Jamodu, the former Minister of Commerce and Industry argued that there is nothing wrong for Nigeria to borrow money to finance its infrastructure.

Jaqmodu who was reacting to comments by the Debt Management Office (DMO) said that Nigeria needed to borrow money to enable it to finance its long-term infrastructure

"I don't think we can do it in good time without borrowing, provided that that borrowing is tied to cash flow so that with future cash flow, we can use it to pay the debt. I am sure within the Debt Management Office, they will know.

"I think we need it and I can assure you too that nobody will lend us money except the project we are going to use it for is a very good purpose.

"And I think borrowing to finance infrastructure is anything bad", he had told News Agency of Nigeria (NAN) in an interview in Abuja

The Director-General of DMO, Mr. Abraham Nwankwo had said last Monday that there was a perceived discrepancy between rising oil revenue and continuous borrowing by government and there was also need to look at the issues from a comprehensive point of view.

He raised the view while addressing a "National Debt Sustainability Analysis meeting.

He also said it was myopic to think that you should not borrow and use the money you are earning.

"It means you are thinking short-term,"' Nwankwo had stressed.

He said that the country must develop the culture of transparency and efficient debt management.

Yet, Mr. Fashola had advised the Federal Government to cut its expenditure and reduce the level of deficit budget financing, which he said, had always exerted pressure on the exchange rate.

"A sound macroeconomic environment is an important ingredient of growth," he said.

A financial consultant, Mr. Chris Namedia, urged the government to take pro-active steps to ensure that the external debt stock did not rise beyond the current level.

Namedia said that government could reduce the external debt stock by encouraging private-public partnerships in financing projects or outright privatisation of some government agencies.

He said that government should reduce its financial contributions to some joint-venture projects.

Namedia advised that the private sector could also take over some projects currently being solely financed by the government.

He commended government's effort in developing the domestic bond market, saying it was a good initiative that would reduce external borrowing.

The President of Ikeja District of ICAN, Mr Joshua Okeowo, said that there should be more discipline in the area of revenue generation.

"The government should diversify the economy and reduce the dependence on crude oil as source of revenue.

"There should be transparent accounting system and regular auditing of government accounts to check for leakages.

"The government needs to demonstrate a strong commitment to fiscal discipline and take the debt stock more seriously," Okeowo said.

It would be recalled that the Debt Management Office (DMO) had said that the nation's external debt stood at 4.5 billion dollars while the domestic debt was N4.5 trillion as at the end of 2010..

Its Director General, Dr Abraham Nwankwo, however, said that the nation's debt position was still sustainable.

Daily Champion/17/05/2011