ActionAid says Nigeria’s economy could face major fiscal crisis

ActionAid has raised an alarm that Nigeria’s economy could face a major fiscal crisis with increasing financing of the fiscal deficit with borrowings.

A press statement issued by the non-governmental organisation on Tuesday after a virtual meeting to review the State of the Nation by its General Assembly Members lamented that the public fiscal deficit, financed mostly by domestic and foreign borrowings, widened with high debt service payments, estimated at more than half of federally collected revenues, pose a major fiscal risk to Nigeria’s economy.

Other observations coming from the meeting are that Nigeria is currently faced with an unprecedented wave of different but overlapping security crises – from kidnapping to extremist insurgencies, lamenting that almost every corner of the country has been hit by violence and crime with the growing insecurity being closely linked to the high rate of poverty in the country.

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Attendees of the meeting also described as unhealthy the ongoing strike of medical doctors across the country being the fourth time since the outbreak of the COVID-19 pandemic, with some of them complaining they are owed salaries for several months. They lamented that many Nigerian media outlets are reporting that patients – some with COVID-19 symptoms – are being turned away at short-staffed hospitals.

They however said the ongoing Review of the 1999 Constitution offers the opportunity for Nigerians to shape the constitution with the goal that it reflects the desires and aspirations of the citizens, stressing that some of the provisions to be considered vital for the uplifting of the status of citizens include Socio-Economic and Cultural Rights as contained in Chapter 2 of The constitution, issues of Gender Equality and a thorough reform of the Nigeria Police.

They observed that the Twitter ban by the Federal Government has had severe economic costs, stating that it is a step backwards for civic engagements and threatens the civic space which has continued to shrink in recent years.

They however recommended that the rising public debt, unemployment, inflation, and high cost of living require the immediate embracing of fiscal federalism in absolute terms, noting that this will enable the country to break the vicious cycle of poverty, eliminate the wholesale dependence on oil which makes Nigeria a monolithic economy.

They also advised that the cracking of the nation’s current security challenges requires increasing the manpower and welfare of all security agencies and equipping them with modern combat equipment, skills, and training, urging the government renew its partnership with neighboring countries to enhance intelligence exchange and information sharing that would help in quelling the insurgency and other sundry crimes, while calling for the state-of-the-art combat Tucano and Alpha jets newly acquired to be deployed immediately to help in further neutralizing the criminal elements with precision and bring the protracted insurgency to an end. 

They urged the federal and state governments to explore different models to improve the work environment for medical practitioners, adding that health insurance must be made mandatory with sound mechanisms to prevent corruption for universal health care coverage. 

On the constitution review, they asked that the non-justiciability of the provisions of chapter 2 of the 1999 constitution should be reviewed and amended by removing the non-justiciable character and make them enforceable in line with international treaties which have been domesticated in Nigeria.

ActionAid says Nigeria’s economy could face major fiscal crisis