The Civil Society Legislative Advocacy Center (CISLAC) and other civil society groups have urged the National Assembly to take more serious steps in helping to address the current hardship in the country through urgent legislative measures that can return the country to economic stability.
The groups said the major concern was the management of rising public debts and the seeming absence of the details of how government had spent the huge loans over the years.
CISLAC ‘s Executive Director, Mr Auwal Rafsanjani, led the groups, which included the Tax Justice and Governance Platform (TJGP), ActionAid, Christian Aid, Centre for Democracy and Development, International Budget Partnership, the Nigeria Labour Congress and Oxfam, to a news conference at the National Assembly in Abuja on Friday.
The groups specifically called for a full investigation into all loans taken by successive governments, especially the $3.4billon World Bank facility, as reported by the Office of the Auditor-General of the Federation in 2020.
They noted, “The escalating debt burden has profound implications for the well-being of Nigerian citizens, and failure to act quickly could result in an additional 23 million Nigerians living in poverty and 80 million working-age citizens without a full-time job by 2030.
“These concerning trends underscore the need for the National Assembly to urgently commit to sound reforms and balanced resource allocation, thereby paving the way for significant investment in critical sectors that directly impact the lives of vulnerable Nigerians.”
Tracing a declining situation back to the last five years, CISLAC noted that by this year (2024), Nigeria’s debt profile would have climbed to N107.38 trillion from N97.9tn in 2023.
Rafsanjani stated, “The trajectory of revenue from the federal government shows a continuous decline in the past 5 years with a 45% revenue shortfall in 2018, a 45% shortfall in 2019, 31% in 2020 and 45%, 41% and 50% in 2021, 2022 and 2023, respectively.
“These revenue shortfalls have created budget deficits that have precipitated our debt crisis and has grown our external debt by 1,333% from the level it was after the Paris Debt buy-back-deal in 2005/06. As of June 2023, Nigeria’s total debt portfolio stood at N87.9trillion ($114.3billion) and will climb to N107.38 trillion in 2024, following recent approvals by the National Assembly.
“Worrisomely, 37% of Nigeria’s total external debt figure is owed to private creditors whose loans attract between 6-9% and shorter repayment period in comparison to loans from multilateral and bilateral sources with interest rates of between 1-3% and longer repayment period of 10-30 years.
“The result is that debt servicing will cost 98% of our budget, and the government will spend six times more on servicing debts than on building new schools and hospitals in 2024. This unsustainable level of public debt highlights the need for a reassessment of government spending and revenue generation.
“As advocates of economic justice, the Tax Justice and Governance Platform (TJGP), with subnational platforms across eighteen (18) states in the country and a National Secretariat coordinated by Civil Society Legislative Advocacy Centre and steered by ActionAid, Christian Aid, Centre for Democracy and Development, International Budget Partnership, the and the Nigeria Labour Congress and Oxfam wishes to lend its voice once again to these growing concerns in demonstration of its civic responsibility.”
Aside from investigating the loans, the National Assembly is being urged to review legal and institutional frameworks related to debt management, including amending the Fiscal Responsibility Act (FRA) 2007.
The groups also recommended that government should redefine the purpose of borrowing to ensure that debts are incurred “for projects that will promote value chain development, improve the macroeconomic framework, develop infrastructure, and build strategic human capital.”
They called on the National Assembly not to approve borrowing for recurrent expenditure and dilatory capital expenditure that “adds no value to economic growth, wealth creation and development.”
Other recommendations were, “strengthening debt sustainability assessments through public debt review mechanisms to assess the affordability and risks associated with new borrowing initiatives.
”Harmonising tax laws and rates to reduce overlaps and inconsistencies, eliminate multiple taxation and improve tax revenue mobilisation. Nigeria should adopt a comprehensive approach to taxation which categorizes taxes to income, consumption and property tax. Every tax should fall under these three categories rather than having all manners of taxes all over the place which are set out to extort business owners rather than generate revenue for the Government.
“Establishing a Tax Committee empowered to approve Double Tax Agreements rather than the general floor of the National Assembly. The Committee should be empowered to monitor and evaluate existing tax treaties and agreements between jurisdictions to make data available for government decisions.
”Revising and harmonising tax incentive frameworks that provide for clarity of policy goals of incentives, the periodic assessment and monitoring of tax incentives using a monitoring and evaluation framework, assessment of cost-benefit and distributional impact, and guidelines for timely reporting of tax expenditures.
“Reducing discretionary powers of executive institutions with statutory mandates and powers to regulate tax incentives and ensuring that granting of major incentives go through parliament.
“Introducing appraisal mechanisms that ensure budget performance is a reflection of the value created and not indication of funds released to MDAs.
”Prioritising spending on policies and programs that will directly affect the general public, especially the low-income earners, such as investing heavily in education, health care, agriculture and future-proof empowerment programmes in a transparent, accountable and sustainable manner.
“With 27% of the country’s average household budgets dedicated to fuel-related expenses (petrol-powered generators and vehicles and heavy reliance on the poor public transport system), appropriation of revenue and reallocation of subsidy savings should also prioritize fixing the power and transport sectors.
“Demanding accountability for petrol subsidy savings and sincerity of purpose in fulfilling the government’s ‘promises of renewed hope’ to the millions of Nigerians who no longer have belts to tighten.”
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