The Debt Management Office (DMO) on Thursday said the country’s debt service to revenue ratio, is not sustainable, arguing that government needs to come up with a strategy that would make infrastructures financed with borrowed funds to generate revenue to service the debts.
Mrs Patience Oniha, the Director-General of DMO, said this in Abuja on Thursday at the fifth Budget Seminar (webinar) organised by the Securities and Exchange Commission (SEC) with the theme, “Financing Nigeria’s Budget and Infrastructure Deficit through the Capital Market.”
According to her, we have done the Sukuk, for instance, but government is the one servicing the debt of those Sukuk.
“They (the debts) are not being serviced with revenue from those sources (infrastructure).
“ I think that when we are talking about those innovations like revenue, bonds and all that, we should be talking about policies to ensure that the projects that we financed generate revenue,’’ she explained.
Dr Afolabi Olowookere, the Head of Economic Research and Policy Management Division of SEC, said the current system where government appeared to be the major financier of infrastructure projects was unsustainable.
Olowookere suggested that adequate cost recovery system be adopted for any infrastructure to be revenue generating.
“One major source for financing infrastructure is Public Private Partnership.
“Government must formulate policies and incentivise the development of domestic public debt markets,’’ he said.
Mr Oscar Onyema, the Chief Executive Officer of the Nigerian Stock Exchange (NSE), said the exchange was ready to support economic development in the country through infrastructural products.