Debt Crisis: Budget Office Wants Salary Hikes, Fuel Subsidy, Suspended

Ben Akabueze, Director General of the Federation’s Budget Office, has recommended suspending salary increases for government agencies and discontinuing the Premium Motor Spirit (PMS) subsidy, among other measures to avert a debt crisis and ensure Nigeria’s debt sustainability.

Speaking on Thursday at the 46th Annual Conference of the Institute of Chartered Secretaries and Administrators of Nigeria, ICSAN, in Lagos on the theme: ‘The National Debt Burden: Causes, Effects, and Realistic Economic Solutions,’ Akabueze said: “To address this challenge and relieve concern about rising debt and debt service, it is important to ensure that public debt is sustainable, and for this to be, urgent decisive measures are required to avert public debt.”

“The critical steps include the implementation of the relevant recommendations and discontinuation of the PMS subsidy by the end of June next year as announced or earlier date. Suspension of new salary increases for government agencies and addressing the issues of pipeline vandalism and reduce oil theft through the reintegration of the war against pipeline vandalism and oil theft by security agencies.”

Remember that President Muhammadu Buhari recently promised to raise civil servants’ salaries, and a committee was formed to oversee the process.

According to Akabueze, the public debt burden has resulted in increased debt service obligations, reduced fiscal space for development spending, the suspension of capital projects, and restrictions on the provision of social amenities.

Mr. Taiwo Owokalade, President of ICSAN, noted in his welcome address that the country has not only accumulated massive amounts of debt, but has also continued to borrow at a rapid pace, making it difficult to service the interest on the debt.

He explained that incurring debt is not in and of itself a negative development, but that the size of the debt in relation to national income, as well as the nature of the projects to which the loans are applied, were important factors to consider.

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