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Debt burden: Budget Office recommends suspension of salary increases, petrol subsidy

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

Speaking yesterday at the 46th Institute of Chartered Secretaries and Administrators of Nigeria, ICSAN, Annual Conference in Lagos, on the theme: ‘The National Debt Burden: Causes, effects and realistic economic solutions’, Akabueze said: “To address this challenge and to relieve the concern on the 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 in order to avert public debt crisis and these steps are critically around enhancing revenue and then improving expenditure and blocking leakages.

“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.”

Recall that President Muhammadu Buhari had recently promised to increase the salaries of civil servants and a committee was set up to drive the process.

Akabueze noted that the public debt burden has resulted in the increasing debt service obligation, lower fiscal space for development spending, suspension of capital projects and constraint in the provisions of social amenities.

In his welcome address, the President of ICSAN, Mr. Taiwo Owokalade, noted that the country has not only amassed huge amounts of debt but has kept borrowing at a fast rate, thus struggling to service the interest on the debt.

He explained that incurring debt is not by itself a negative development, but the size of the debt against the national income, as well the nature of the projects to which the loans are applied were the pertinent issues for serious consideration.


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