House of Representatives Orders Audit of Nigeria’s Public Debt from 1999 to Date

In a significant move to bring more accountability to Nigeria’s financial practices, the House of Representatives has ordered an extensive audit of all loans taken by the federal and state governments since the nation transitioned to democratic rule in 1999. The comprehensive review aims to address mounting concerns over Nigeria’s rising debt profile and assess how funds have been utilized over the past 25 years. The initiative was propelled by a motion from Lanre Okunola, a representative of the Surulere II Federal Constituency, Lagos State, calling for stricter oversight of debt accumulation and utilization at all levels of government.

Rising Debt and Its Fiscal Impact

Nigeria’s debt levels have surged in recent years, a development that has raised concerns among both policymakers and the public. According to data from the Debt Management Office (DMO), the country’s public debt reached N121.67 trillion (about $91.46 billion) by March 31, 2024, marking a steep rise from N97.34 trillion (about $108.23 billion) at the end of 2023. This translates to an increase of approximately N24.33 trillion in just three months. The borrowed funds have been used primarily to finance various developmental projects and address budget deficits. However, the rapid debt increase has sparked questions about Nigeria’s fiscal stability and economic future, as the cost of servicing this debt continues to strain national and state budgets.

Importance of Accountability in Debt Management

The 1999 Constitution, along with the Fiscal Responsibility Act (2007) and the Debt Management Office Establishment Act (2003), mandates that the National Assembly oversees and approves all government borrowing. However, Okunola argued that this oversight process has not been consistently applied, with some state-level loans bypassing required legislative approvals. Additionally, reports indicate that some of the funds borrowed for developmental projects were either underutilized or diverted, reducing the intended benefits to the general public.

With over 40% of developing nations, including Nigeria, now allocating more resources to debt servicing than to critical sectors such as healthcare, education, and infrastructure, the implications for Nigeria’s long-term economic stability are profound. Okunola highlighted that unregulated debt could significantly harm fiscal stability, leaving less funding for key public services and creating an unsustainable financial burden for future generations.

Call for a Full Audit and Improved Oversight

In response to these concerns, the House has tasked its Committee on Aids, Loans, and Debt Management to conduct a full audit of all loans taken by both the federal and state governments since 1999. This investigation will not only examine the scale of Nigeria’s borrowing but also assess whether the loans were used for their intended purposes. The committee’s findings, expected within a month, will help the House develop strategies for more effective oversight of Nigeria’s debt.

Path to Fiscal Stability and Sustainable Development

The House’s decision underscores a commitment to fiscal responsibility and sustainable economic growth. By taking a close look at Nigeria’s borrowing practices, legislators aim to ensure that every loan contributes to the country’s development goals without imposing unnecessary burdens on future budgets. This audit will also promote a culture of accountability, signaling to lenders and international organizations that Nigeria is serious about managing its debt responsibly.

For further insights, view the full report from the House of Representatives at Pun.

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