Economy - N11.24trn Debt: Nigeria’s Risk Of Default Now High – Rewane

With Nigeria’s total debt stock standing at N11.24 trillion or $67.72 billion as at December 31, 2014, and declining revenue from its major source of income, the managing director and chief executive of Financial Derivatives Company Limited (FDC), Bismarck Rewane, has said the probability of defaulting on the country’s loans is rising.

Speaking on “Declining Revenue: Time for New Ideas” at a Seaside Breakfast Session with Remita in Lagos, Rewane noted that except there is a rescheduling of the country’s debt, the probability of default is high.

According to him, Nigeria’s external debt in 2003 when the country got debt forgiveness was about $3 billion to $4 billion.

“Today, our external debt is back up to $26 billion. So you have a debt problem and you have a revenue problem and the probability of a default on your debt obligations is relatively high except you are rescheduling.

“When you want to reschedule your debt, it means that you have to go to Washington for a full and frank discussion and in diplomatic terms if you say you have a full and frank meeting, it means that we abuse ourselves.”

Stressing that Nigeria is currently having a fiscal problem, Bismark said, “our revenue has come down, our reserves is sinking, our exports have come down and our imports are high.”

Bismarck listed information and communication technology (ICT) as one of the tools that can be used to increase tax revenue collection, noting that the ICT has the potential to transform tax revenue collection and improve services to tax payers.

Also speaking at the session, the chairman of SystemSpects board of directors, Dr Christopher Kolade, who was represented by the director, SystemSpecs, said that Nigeria needed to change the way payments were handled.He said using the ICT to respond to oil slump is what Remita stood for.