THE Institute of Chartered Accountants of Nigeria, ICAN, has raised alarm over the impact of Nigeria’s rising debt burden as the debt service-to-revenue ratio reaches 70 percent.
The ratio implies that 70 percent of the country’s annual revenue now goes to servicing debts.
Speaking at her inauguration as the 57th President of ICAN in Lagos, Mrs. Comfort Eyitayo, said that as financial experts, they would lend their voices to the calls by patriotic Nigerians that the trend towards borrowing to finance consumption should be discouraged notwithstanding that the debt to Gross Domestic Product (GDP) ratio is within acceptable fiscal and economic limits.
She stated: “In any case, what does the GDP means to the common man when inflation is over 18 percent and he cannot afford three square meals? For the nation to survive economically, it cannot continue to spend over 70 percent of its revenue on debt servicing. “As a body, we would take on the advocacy role and collaborate with government to review the planning, budgeting and financing mechanics.
“As professionals and expert risk managers, we are aware of the causal relationship between poverty, hunger and crimes. The hunger and anger of the unemployed and poor citizens are manifesting in increased crimes and criminality.
“Therefore, as stakeholders, the Institute will collaborate with the government to evolve better strategies that will address the underlying causes of insecurity, than the mere distribution of material and financial palliatives. “To this end, the Institute will engage the government and critical stakeholders with a view to resolving the crucial issues of state and the economic malaise of underdevelopment.”
Continuing, she said: “We are challenged not only by the harsh economic circumstances of our nation, but also, by pieces of regulations designed to diminish the importance of professionalism in public governance.
“In the midst of the ill-advised policy, the nation expects to continue to attract more foreign direct investments and grants from donor agencies. This expectation belies the report of a recent study by MOSAIC (Memorandum of Understanding to Strengthen Accountancy and Improve Collaboration), in particular GAVI and The Global Fund (GF).”