Nigeria, the largest economies in Africa and one of the promising developing economies in the World still grapple with serious financial and debt challenges. Government keep borrowing from the international bodies and countries for various reasons like infrastructural needs, security, healthcare,economic bailout etc and this amount of money runs in billion dollar indebted to her foreign partners.
In many instances, China have been the lender as their money which is a debt, are used to the construction of Lagos to Abeokuta Railways, reconstruction of federal roads and bridges which amount to billions of dollar etc. These loan agreement between Nigeria and Chinese state-owned banks provides the money used to finance these projects with the aim of improving her transportation and energy infrastructures. Through various bilateral agreement, Nigeria signed with other financial countries and bodies to secure more fund for investment in her business, technology, mining and tourism development. But there is strong concern over these fund secured as their conditions, transparency of its agreement, interest rate, repayment terms and other debt sustainability concerns.
Analysis over the debt sustainability is very important to avoid becoming more indebted and financial instable. A complex and sustain strategies should be in place to reduce and eventually eliminate their debt. Although its might be a long term project that will require careful planning, serious fiscal management, administrative and economic reforms. Although it might be like a joke, when issues of financial reforms are discussed but steps can be considered toward more financial stability and debt elimination. Lets explore some of those steps so as to have better and sustainable debt management and profile.
FISCAL MANAGEMENT
Government should develop financial framework and structure on how revenue, taxes, fees and royalties as part of the revenue sources are collected, managed, spend, and allocated. Although over the years, fiscal management have been challenged by several factors which are bureaucratically and administrative in nature. A serious look should be taken over how Government spent and expense over the revenue generated. Implementation of strict fiscal management strategies can boost the fund collected from several sources and allocations.
Government should create and monitor multiple revenue streams like the natural resources exploration and exportation. Historically, Nigerian revenue depend heavily on Crude oil sales for her infrastructure, energy, social welfare, trade, education, health care, administration and even governance. As Nigerian economy depends solely on crude oil, her annual budget over time have been unstable as oil prices fluctuated due to demands and supply at the international market. Non-oil revenue sources should be encouraged. Taxation of various kinds like the value-added tax, corporate income tax, personal income tax, fees and dues like stamp dues, custom duties and other governmental charges should be considered, encouraged and manage effectively.
In effective fiscal management, Expenditure and spending should be considered. Recurrent expenditure like salaries, pension, governance cost and debt servicing should be managed as it is the top priority of every government in their spending for better fiscal outlook where the social, administrative and economic welfare with debt sustainable plans. capital expenditure which focus on spending on crucial infrastructural development projects like roads, bridges, buildings, airports, seaports, stadium, parks etc which serves as the bases for long term economic growth and enhances the quality of life and vital sectors like educations, healthcare, technology, sport etc. Nigerian fiscal structure includes debt servicing and management sector as loans taken and will be secured are considered. It cost Nigeria a lot and occupy a large portion of the budget to service the existing debt, its principal and interest repayments of both foreign and domestic debts. Government allocate fund at the budget for social obligation and welfare of her people. Social programs like health, education, poverty alleviation projects and other initiatives like School feeding, Npower, Geep scheme etc, which is aimed at improving the welfare of her people. Defence and security are major portion of Nigeria budget and fiscal structures.
Recently, Nigeria spends more in defence and security as the insecurities and violent crime is getting higher within her shores which higher than entire amount in the budget of other african nations so as to improve security as well as maintaining peace and order. More fund was spend to secure more aircraft, ships for more firepower of the army to defend her territory and waters.
ANTI CORRUPTION CAMPAIGN
Corruption among government officials and administrative heads have really cost Nigeria much and drain her wealth as they steal those fund from revenue generated and even from allocated in budgets for their personal use. Many corrupt official caught in act give flimsy reasons like Animals like Snake swallowed million of the fund while many are in abject poverty, unpaid salaries, infrastructural deficits, poor educational and health care management, and in-funded army as their money have been stolen or diverted for their selfish and personal reason.
Honest and active anti-corrupt actions should be strengthen and implemented to detect, prevent and combat corruption as corruption leads to mismanagement of fund, undermine economic development, erodes pubic trust, distort fair competition needed as a drive for innovation and growth in the society. There are two national bodies saddled with the duties and responsibility to combat corruption and financial crime in Nigeria, ICPC and EFCC but their work and operation are not yet sufficient as corruption still reign supremely in every nigerian economic and financial sectors. Legislation and legal framework should be designed with the aim strengthen to these bodies as independent bodies away from the corrupt political class to witch-hunt their corrupt opposers.
CONCLUSION
There are still many plans to be adopted so as to reduce spending, boost revenue and effective fund management to reduce debt and its negative effect on Nigerian market space. Relations with other countries and bodies should be reached and maintain so as to improve trade, skill and knowledge improvement than borrowing from them at all time.
Debt sustainability plans which center on timely repayment and settlement of existing debt should be reached and unnecessary expenditures avoided to improve our wealth and welfare.