Nigeria has a debt management bureaucracy. We hope it ends there, as if care is not taken, even the ministry of finance will become a ministry of debt management. Yes, our sovereign debt is looking amorphous, unbounded and unconstrained: “Credit ratings agency Fitch has sounded the alarm over Nigeria’s economic challenges, highlighting persistent foreign exchange shortages and a soaring debt service-to-revenue ratio as factors contributing to a precarious sovereign credit rating.
“Gaimin Nonyane, Fitch’s Director of Middle East and Africa Sovereigns, voiced concerns regarding the Central Bank of Nigeria’s (CBN) struggles to amass sufficient foreign exchange reserves, leaving them ill-equipped to clear the forex backlog and meet the substantial external financing needs of the private sector.”
Yet, we must acknowledge the efforts of those tasked with this challenge. That said, we hope they focus on not using finance-only strategy, but production-first strategy. The Federal Government of Nigeria can pick 6 cities in the six geopolitical regions and guarantee 24/7 electricity since it is obvious we cannot deliver such nationwide for 25 years. With that energy certainty, companies will at least know where they can cite their factories.
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In AO Lawal’s textbook of economics, he noted that one of the factors which do affect the location and localization of industries is availability of energy. That remains till today, and Nigeria needs to fix that loophole for our Naira to rise again.
Nigeria's sovereign debt is looking amorphous, unbounded and unconstrained: “Credit ratings agency Fitch has sounded the alarm over Nigeria's economic challenges, highlighting persistent foreign exchange shortages and a soaring debt service-to-revenue ratio as factors… pic.twitter.com/6rC2zPYJ2I
— Ndubuisi Ekekwe (@ndekekwe) January 19, 2024
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