TO BORROW OR NOT TO BORROW, LET THE DATA SPEAK

A post by a friend on the fiscal space of the Nigerian government. Enjoy!!

themetrix

The Federal Government of Nigeria announced on October 2016 that it was going to borrow $29.9 billion (spread over three years) to finance the rebuilding of the nation’s decaying infrastructure and build new ones. The proposal has generated a lot of support and disaffection from various quarters. While some have called for its use to stimulate an ailing economy, others are contending that it amounts to mortgaging the future of the unborn, that whatever we need to finance development and stimulate growth can be sourced for without necessarily borrowing.

My task with this little piece is to present the data on Nigeria’s borrowing side-by-side the data on our ability to pay (economic growth) and give a summary of what I think based on evidence from data. Even though I agree with Prof. Akpan Ekpo that revenue and not GDP pays for debts, the later simply shows our capacity to pay…

View original post 754 more words

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