The Civil Society Legislative Advocacy Centre has partnered with the Christian Aid international over the increasing role of private creditors in Nigeria’s Debt Crisis and its increasing concern over the country’s capital.
CISLAC, with the support of Christian Aid international, organised a Media Parley on the role of Private Creditors in the Nigerians Debt crisis on the 30th of January, 2023 at the Christian Aid office, Abuja.
Speaking at the event, the Executive Director Auwal Rafsanjani said the economic state of the country was worrisome and there was a quick need to address the issue before it gets out of hand.
“Nigerians national debit is growing and increasingly puting the country in a precarious situation with a high significant implications for human rights including education, health, climate change mitigation and adaptation,” he said.
“The growing proportion of external debt owned to private creditors under opaque terms and often subject to high interest rate is contributing to spraining debt servicing costs increasing the risk to Nigerians economy.
Mr Rafsanjani finds its concerning that the debt service cost of the nation massively exceeds its annual revenue. Nigeria’s public debt stock currently stands at N42.84 trillion, according to reports from the Debt Management Office in June 2022.
“With the refusal of private creditors to embrace debt relief initiatives, the Nigerian government will continue to spend a significant part of its budget to service loans to private creditors under very stringent conditions, including high interest rates. This has drastically reduced due commitment to more critical socioeconomic sectors like health and Education,” he said.
Recent reports predicts that Nigeria’s annual debt servicing cost will peak towards N10.43 trillion in 2025, consequently incurring an economic crisis. Mr Rafsanjani notes that the present and incoming government must be transparent enough to aid effective tracking of the nation’s debt profile.
“The concern is that the new frontiers of lending (Private Creditors) operates to increase the cost of debt servicing while restricting governments’ fiscal strength and constraining their ability to respond adequately to social and economic emergencies brought to the fore by the outbreak of the Covid-19 Pandemic,” he said.
“We are deeply concerned by the lack of vigorous scrutiny and attention by the law makers in granting requests for loans without reflecting the provisions of the Fiscal Responsibility Act and the greater implication for the Nation economic state.
“We have launched a research product that centres on revealing and challenging the role of private creditors in hindering people’s recoveries to enhance the urgency with which the international community must address sovereign debt crisis.”
Christian-Aid International, an organization that seeks to improve the health of poor and marginalised people in society, revealed it was exploring projects geared towards climate actions and the fulfillment of human rights.
Uzor Uzoma, the Senior Program Coordinator, said: “We aim to contribute to an international financial architecture and macroeconomic environment that enables the fulfillment of human rights and the undertaking of climate action in economics that centre on care.
“We believe that the timing is auspicious to intensify the urgency for adequate responses by relevant actors within the debt financing ecosystem that will contribute to cushioning this worsening economic crises.
“We hereby call on all state and non state actors to heed this call and mobilize collective actions to nip this issue in the bud as we head towards a fiscal cliff in the interest of the increasing population of poor Nigerians whose lives are affected by the crisis.”