Lagos - The Lagos Chamber of Commerce and Industry (LCCI) has described Nigeria’s debt profile of 44 billion dollars as clog in the wheel of economic growth.
Mr Goodie Ibru, the President of the LCCI, made the observation during an interview with the News Agency of Nigeria (NAN) on the sideline of the chamber’s third quarter press briefing in Lagos.
Ibru said that the high debt profile was unsustainable, taking into account the current debt service ratio of 20 per cent of the national budget.
``The current debt service provision in the 2013 budget is N592 billion and the domestic debts stand at 38 billion dollars (N5700 trillion).
``This is not good for the economy,’’ he said.
He described as inappropriate the use of a global benchmark of debt to the Gross Domestic Product (GDP) adopted by the Federal Government.
According to him, agriculture, which is a major component of Nigeria‘s GDP, is not revenue yielding activities unlike the case in other countries.
He urged the Federal Government to desist from borrowing at exorbitant rates.
``Borrowing at high rates is having a toll on the local operators’ access to cheap funds and creating distortions in the credit market.
``Private sector is being crowded out when investment in treasury bills and government bonds are more attractive than putting money in fixed deposits or lending to enterprises,’’ he said.
Ibru commended the Federal Government for the early presentation of the 2013 budget proposals to the National Assembly.
This, he said, would give sufficient time for deliberation.
The LCCI boss, however, said that it would have been useful if President Goodluck Jonathan had highlighted the trust of the monetary policy in 2013 because of its importance to economic growth.