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Thursday, March 23, 2023

Experts back FG on extension of debt payment

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Concerned financial experts have supported the decision of the Federal Government to seek extension of debt payment from global financial institutions due to tight fiscal conditions.

They said this in separate chat with Newsmen in Lagos on Friday.

A former lecturer of Economics at the Pan Atlantic University, Mr Austine Nwaeze, said the federal government’s decision to demand debt extension payment was welcome.

“The idea of seeking debt extension from our international lenders is crucial due to declining governmental revenues.

“The extension will create opportunity for fiscal relief and reposition the economy for uninterrupted debt payment,” Nwaeze said.

He noted that the proposed extension of the country’s debt payment to global financial institutions was in order so as not to default.

“Especially for lower middle income country such as ours which have been contending with structural challenges in the economy and worsen by crude oil theft and the current Russia-Ukrane crisis,” Nwaeze said.

Also, President, Progressive Shareholders Association of Nigeria (PSAN), Mr Boniface Okezie, said the federal government’s choice to seek debt extension at the period of downturn in the economy was a usual practice.

He also said that the debt payment would pose serious challenges because of the petrol subsidy payment.

“The funds expended on petrol subsidy payment is on the increase amid meeting other competing needs of the society.

“The money expended on subsidy for petrol is not geared at the productive sectors of the economy, but on consumables,” Okezie said.

He noted that the federal government could cut down the high cost of government to have some fiscal respite in the economy.

“We expect the government to commence the implementation of the merging of the civil service according to the Steve Oronsaye report.

“Reforming the civil service is imperative to reduce the cost of governance and use more of technology to ensure they become more efficient,” he said.

NAN reports that the Minister of Finance and National Planning, Mrs Zainab Ahmed, said that the Federal Government was not seeking debt restructuring from global financial institutions but extension of repayment period and possible bond buy back.

Ahmed stated this during the debate on the Global Economy held on the sidelines of the ongoing annual meetings of the World Bank and IMF.

She said on Wednesday that the government had been engaging financial institutions to look at the opportunity to restructure the nation’s debt.

According to her, this will help to further stretch the debt service period to give Nigeria more fiscal relief.

The minister, while speaking at the debate on Global Economy, said, “We are actually filling the pressures, the market costs is too high for us to come out. (NAN)

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