An inflection point for the nation: “Nigeria’s debt-to-GDP ratio has crossed the 50% threshold for the first time, underscoring the country’s escalating fiscal challenges…” Nigeria needs to work on this ratio of debt/GDP, and must do it within the Nigerian context. Here, we have a strategic objective which is to make debt/GDP lowest possible. So, we can reduce debt, OR we can improve GDP, OR we can reduce debt and increase GDP at the same time, ceteris paribus.
Unfortunately, this is not elementary algebra as reducing debt, in a non-productive country may not even enable growth to happen, since you need to stimulate the economy for growth to happen. What do you do? We need to add a fudge factor which is debt for production, not debt for consumption. If you do that, debt will go up, but you can grow the economy, improving GDP faster than the growth of the debt.
Now, the real question is this: how can Nigeria run a framework of “debt for production” governance since it is nearly impossible to make growth happen in Nigeria without debt since you need money to make money, they say?
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