New Contributions From Expatriates To Mitigate Debt Burden, Bolster Infrastructure Development
The increased involvement of expatriates in the drive to grow the nation’s revenue is projected to mitigate the debt crisis that the nation is presently entangled in, according to feelers from reliable sources in the Presidency.
Nigeria’s Debt Management Office (DMO) presently puts the nation’s debt burden at N87.38tn ($113.42bn), with the government hoping to spend 30 percent of its 2024 budget on debt servicing.
The commitment to debt servicing has led to a reduced allocation to critical sectors of the economy, including education, health, infrastructure, social development, and poverty reduction.
The crisis has lately influenced the government’s renewed initiative to diversify its revenue base to include earnings from agriculture, steel, mining, and quarrying, away from the hitherto dominant income from oil and gas.
While these are considered long-term plans, the government has reached an advanced stage in considering other soft, short-term measures, including the quest for portfolio investment and the inclusion of sections of the systems in its income-generating net.
Featuring prominently in this fresh drive are expatriates who are said to have been contributing less than they should, going by the practices in other nations, including Japan, Singapore, Pakistan, Malaysia, and Saudi Arabia, among others.
Authoritative sources said at the weekend that with the projected $ 2 billion per annum additional earnings from the nearly 200,000 expatriates in the country, the nation should be able to mitigate the crisis from a huge debt burden, in addition to meeting its infrastructure development needs.
According to the source, “What the government is presently trying to do is to be innovative in financing. In infrastructure, for instance, creativity is needed to address the financing shortfall for infrastructure, which is estimated as requiring about $3 trillion over the next 30 years”
The source stressed that to close its current infrastructure gap and reach the desired total investment levels, Nigeria must aggressively increase infrastructure funding, subject to more ingenious ways of raising funds.
“The investments over the next 30 years are in total $2.9 trillion. Spending would need to ramp up fairly quickly, from the current 3-5% of GDP to an average of 9% over 30 years. Given Nigeria’s high GDP growth projected for the period, such a ramp-up is particularly challenging.”
The source noted that the planned new contributions from expatriates will also help shore up the nation’s percentile earnings from non-oil export, presently at 16-17%, compared to, for instance, G20 countries where it is about 60 to 100%.
Other reasons for the maturing plan are that the greater contribution from expatriates will improve private sector profitability, increase labour profitability, positively impact unemployment and underemployment, enhance non-oil revenue generation, and then provide a level playing field for Nigerian citizens.
The source added: “With the greatest respect, expatriates working in Nigeria get undue advantage by making their income free from any obligation in their home countries (like India, Pakistan, and the UK with few exceptions like the USA where global income is monitored).
“The argument is when a person earns a living in Nigeria, the Federal Government is entitled to get some dues, which is different from the contributions that they are expected to pay in the states they work in, just like citizens do.”