FG should only borrow for capital expenditure, says ex-CBN director

Titus Okunrounmu, a former director of the Central Bank of Nigeria (CBN), has advised the federal government to only borrow for capital expenditure.

Speaking to NAN on Monday in Ogun, Okunrounmu said borrowing for capital projects facilitates repayment through proceeds from such projects.

As at June 20, 2024, Nigeria’s total public debt reached N121.67 trillion, according to the Debt Management Office (DMO).

Okunrounmu said the federal government’s debt servicing costs significantly increased from N9.8 trillion in 2023 to N12.1 trillion in 2024.

He, therefore, advised the government to strategically reduce the cost of governance in 2025.

However, the ex-CBN director commended the administration for the Port Harcourt refinery’s resuscitation.

“The resuscitation of Port-Harcourt refinery was a welcome development and a boost to Nigeria’s economy,” Okunrounmu said.

“This will help the federal government to stop exporting crude oil for importation of refined products into the country.

“In addition, the country would be able to export refined petrol products to West Africa countries, thus generating more revenue.”

Okunrounmu asked the Nigeria National Petroleum Company (NNPC) Limited to regularly maintain the refineries for optimal production and service delivery.

On December 18, 2024, President Bola Tinubu presented the 2025 budget to a joint session of the national assembly.

In the N49.7 trillion budget, Nigeria plans to spend N15.81 trillion on debt servicing in 2025, targeting N34.82 trillion in revenue to fund the budget.

With a total of N13.08 trillion (3.89 percent of GDP) deficit, Tinubu described the described the proposed expenditure as an “ambitious but necessary budget to secure our future”.