Economic experts have knocked the Federal Government for stacking up foreign reserves while also accumulating debts, saying the strategy is injurious to the economy.
The nation’s foreign reserve currently stands at $47bn, a huge improvement from the $29.6bn it was when the current administration took over in 2015.
In the same vein, the nation’s debt stock has climbed up from N12trillion in 2015 to N22trillion at the moment.
In an interview with Saturday Tribune, Professor Festus Epetimehin, Dean, Faculty of Business Administration, Joseph Ayo Babalola University, Ikeji Arakeji, Osun State, questioned the economic rationale of the position taken by the government.
His words, “Whenever I hear the CBN governor speak of the rising foreign reserve, I cannot but wonder what kind of economic model the country is practicing.
“ Why is the foreign reserve rising? It is because of the rising crude oil price as well as the external loans taken by the government.
“Now, if you take loan which you are going to repay, is it a plus or a minus? Is that a bragging right?
“ Can you brag about having a rising reserve while your debt profile is also on the increase?
“We have seen in this country an unprecedented rise in debt without a corresponding increase in infrastructure.
“ What has been accomplished with the over N7 trillion debt that has been amassed in about three years? Where are the new roads? Where are the new airports? Where are the new hospitals? Where are the projects that would generate funds with which the loans would be repaid?
“Instead of the self adulation of the government over the rising reserve, the government should work hard to reduce external and internal borrowings because these are some of the factors militating against the economy.
“Without the government reducing the debt profile, not only will Nigerians be poor now, they will also be poor in the future because future revenues are already pledged to debt repayment.”
Speaking along the same line, Dr Albert Aliye of Genesis Associates, Ilupeju, Lagos, described the Nigerian economy as a very fragile one that cannot withstand any serious threat because the managers are not transparent.
According to Aliye, who is an economist, “The tragedy of the economy is that despite the padding by the government officials, investors are not attracted to the country.
“ It does not make much sense to borrow if you have a healthy reserve. So, investors are not deceived. They may not have the whole facts but they can see your results.
“If your reserve is growing, why is your debt profile rising? If your reserve is growing, why is one-third of your budget financed with debt? If your reserve is rising why does it not reflect on the value of your currency? If you are earning more, why are you borrowing more?
“ These are questions that not just Nigerians but foreign investors want answers to. What attracts investors to a nation is transparency. Nigeria is not having new investors because investors do not believe in the way we manage our economy.”
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