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Wednesday, January 2, 2013

Economists advise FG to check rising debt profile

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Economists advise FG to check rising debt profile
Jan 3rd 2013, 01:55

Some economists have advised the Federal Government to check the country's rising debt profile to save the private sector from further job losses.

They told the News Agency of Nigeria in Lagos on Wednesday that the rising debt stock could retard development and cause more hardship to the people.

The Director-General, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf, said the nation's domestic debt stock was more disturbing than the external debt.

Yusuf said the government might not be in a position to execute projects to aid the growth of the private sector if the rising debt stock was not checked.

According to him, the increase in the domestic debt will make it difficult for the private sector to access credit to import raw materials.

He said that the cost of servicing debts was too high, even when other sectors were not well funded.

"The rate at which the Federal Government is borrowing is high and no country can develop with high interest rates on loans," he said.

The General Manager, True Bond Microfinance Bank, Mr. Wole Olowu, advised the government to rationalise its structures, stressing that some agencies were performing same functions.

He also urged the government to tackle the problem of ghost workers in the public service to reduce the debt profile drastically.

"The government is losing huge money through this medium, which can be used to finance other sectors of the economy," he said.

Olowu said the problem of inflated contracts must also be tackled, alleging that majority of contracts were over-bloated.

A Senior Lecturer in the Department of Economics, University of Lagos, Dr. Kazzem Bello, said excessive borrowing would not bring about national development, but would rather inflict poverty on the people.

He advised the government to drastically reduce its recurrent expenditure to enable it save funds to execute capital projects.

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