FG May Borrow To Pay Debts Unless Revenues Rise, Expert Warns

A financial analyst and CEO of Cowry Assets Management, Johnson Chukwu, has warned that the federal government might end up borrowing to pay the debts it is owning, if measures are not taken to shore up its revenue. Mr. Chukwu, who was speaking on TVC Journalist Hangout and monitored by our reporter, stated that since the government is borrowing to pay salaries and wages, it is time to take steps to limit borrowing. He pointed out that the use of 90 per cent of the country’s total revenue to pay debt interest and not the principal debt portends problems that revenues generated will not be enough to pay workers’ salaries. “Ninety per cent of the country’s total revenue is used to pay debt interest; we are left to 10 per cent to pay salaries and wages. For the past five years, every money borrowed was to fund infrastructures and pay salaries. Last year was an abnormal year so it can be excused for borrowing but subsequent years should not follow the pattern,” Chukwu said. “It must be stated that borrowing to pay salaries did not start last year as the government has been borrowing since 2016 to pay its employees, so the minister of finance declaring that information in the public is not a new thing to people like us. since it is a consistent trend, you can’t really say, justifiably that that only occurred because of covid-19 since government revenue shrank,” he said.