 We're back with the breakfast and plus TV Africa. It's time for Rossi Luka. Some statistics have been put out by the World Bank. Well, the World Bank has projected that debt servicing will go up 123.4% of the federal government's revenue in 2023. The document titled Niger Republic Finance Review, Physical Adjustment for Better and Sustainable Development Result projected that debt servicing would go up 102, 100.2% of the federal government's revenue by the end of 2022. Now in Africa's polls report, the Washington base bank had said that Nigeria's debt service to revenue ratio could stand at 102.3% by the end of 2022. It had described the public debt to Nigeria's concerning due to the rising debt service to revenue ratio. Meanwhile, Nigeria's public debts rose to 44.06 trillion in the third quarter of 2022, with the country struggling with a repayment burden. Now, according to publications from the debt management office, a total public debt stock rose from 42.84 trillion recorded in the second quarter to 44.06 trillion in the third quarter of 2022. The DMO's effort, the increase in public debt was due to new borrowings by the federal government to part finance the deficit in the 2022 Appropriation Act alongside new borrowings by the sub-nationals that state. It also noted that the total public debt stock consisted of domestic debts of 26.92 trillion, an external debt of 17.15 trillion era. The conversation is almost endless, but we have to invite our guests to join at this point in time. Ogunna Okuku is an investment and economic development expert. He joins us. Thank you, Ogunna, for being part of the show this morning. Well, we also have Professor Ken Ife, who's a developmental economist and lead consultant of a course. Thank you so much, Professor Ken. Yes, thank you for joining. And thank you for having me. All right, so thank you for joining, gentlemen. Thank you. Let me start with Ogunna. What are your thoughts about this statistics? Of course, the projection from the World Bank. We have a lot of Nigerians who are thinking that, you know, this is a boring institution, so it might just just be a gimmick, another projection, another, you know, warring statistics just to put us in a sad situation. What are your thoughts really? Yeah, these are actually realities, you know, and these are conversations that have been, you know, coming up, you know, for the past few years, people have been saying, please, you guys are borrowing so much. Why are we borrowing so much? And then the conversation has always been, the response from the government has always been, oh no, our debt to GDP is still very comfortable. We can still borrow. But the issue has always been, how do you repay? What are the plans that you have to repay? So for me, borrowing has never been a problem. Our problem has only been how to get the revenue, how to, you know, increase our revenue stream as a country to be able to service our debt. So at this point in time, if it's not becoming, it's not, it didn't come as a shock to me. I knew this time would come when it would become a niche to begin to, you know, to, you know, every revenue we make, or even, you know, to be able to use that to service our debt. So the real problem has a normal revenue. So that is why we're where we are. All right. Prof. Befair, this statistic, I mean, from the World Bank, 123% means that obviously another deficit budget, you know, if you want to call it that. I hope I am I correct? Then how did Nigeria get to this point? Because I know that that was a point at which we crossed the line from having a healthy budget, you know, even making money to now not making any money at all and using our entire revenue to pay our debts. So how did we get to this point? I think it was the 2020 budget or 2019 budget. I'm not sure. But how did we get to the point where we crossed the line to now have a deficit budget? We've always been borrowing. And there's nothing wrong with borrowing. You have to, every country borrows, every individual, every business borrows. But the thing is, how do you make conscious efforts to match your borrowing to the revenue? And that raises a question is if you're going to help you tie the infrastructure you are borrowing money for and the potential of that infrastructure to repay the money. If you are going to borrow $800 million to build new terminals in the airports, what kind of revenue stream we are expected to be able to offset that borrowing? So not that you have a one-to-one relationship, but at least we make that effort. And one ought to see this in the cost-benefit analysis with the fiscal responsibility act 2007 says it needs to be performed. But put aside, the laws there are very, very clear about what to borrow. It has to be for capital and expenditure and revenue and sorry, and the human resources, investment in human resources. It also has provisions. It has to be a long-term borrowing. So when you have this structure, it's about shifting much of the short-term borrowing to a medium-long-term borrowing. So there's a lot of stuff. All the things we require are in that law in that area 2007. But the peculiarity of this borrowing from 2015 was a decision by the government to honor the obligations of previous governments. And what has happened is that a lot of contracts have been awarded on infrastructure. And then we had the situation of when they were coming in that all these people are bound on sites because they couldn't get paid. So you now say, all right, everyone should go back to site and then I'll find the money whenever I can find it to pay. That's why in all the roads, you will see what's going on. They may not all have been completed, but they are there. But is there a reason to focus on infrastructure? Of course there's yes, 30 percent. Our stock of infrastructure is at 5 percent. And when you compare South Africa, it's about 85 percent. So we are so far down there in terms of infrastructure. But you cannot use that word infrastructure to cover all the borrowing. You're going to be 2.4. It has to be economic. It has to be capable of repaying the loan. So there are so many things in that mix. Let me come down to your question. How else did we get there? If you need to borrow, in fact, anything you want to do, you have to borrow. You have to invest. The model is this. You invest money. Even in fighting corruption, you have to invest in the systems you are going to use and the government you are going to use. If you want to consolidate your MDS, you have to borrow money to the structure. The only thing you want to do, and if you want to invest, you have to borrow money. Now, the thing is, if you invest, the investment creates economic activity. Economic activity employs people. People receive revenue. And from that revenue, they have surplus. From that surplus, they pay for education, health, and all the other things, and poverty reduction and all of that. So that's the cycle. Don't tell me that, oh, government can borrow, and then you go to the defense committee and say, I'm sorry, we are not going to borrow anymore, so you can't get the equipment to fight the runs. And then we tell the workers, oh, sorry, we can't borrow anymore because you can pay their salary. No. Every government tries to have their national savings. From the national savings, you take your money to invest. If you don't have national savings, you have no choice than to go and borrow. And who goes out borrowing? Goes out borrowing. That's a simple fact. And we need to understand that we have had to deal with. If you look at early this year, we were looking at 1.2 trillion Naira as a deficit coming from crude. That is what they call your subsidy. But as soon as they went to the meeting with them, suddenly this picture changes, and the PIA coming on. So we're not going to have 6 trillion. And that means the government has to go and borrow 500 billion Naira every month just to satisfy the appetite of people who want to continue to borrow. So these are the sources of the borrowing. Before this comes in, I just want to bring Obona in at this point. I mean, Nigeria in 2006 became the first African country to declare its debt under the Ambassador Administration. You look at the different initiatives for debt forgiveness or debt cancellation. One of them was HIPIC, a highly indebted poor country's initiative. We in Nigeria wasn't a part of that because of certain issues, one of which was that the country was perceived to have made enough money from oil and gas to offset its debt. So Nigeria said to have been denied debt relief under both the Naples terms and the HIPIC initiative, at least in part because of its oil wealth, which prevented it from being considered a poor country. However, Nigeria was still able to do much because Sobas Angel declared the nation's debt in 2006. The first administration to do so, African country to do so, said this public that what happened that a country that had a philosophy like this of clearing its debt and being financially healthy now became a country that believed that the best way to find infrastructure is to get back into the debt trap. This is an ecosystem where you have a national growth plan and then you follow it through. Now at the time we got the debt cancellation, there were plans to invest in strategic infrastructure that would help growth, which was why a lot of monies were put into IPP and other kinds of transactions that would help, you know, those investment that would help propel the economy. But were we able to follow all these transactions through? I can tell you no, were they prudent in trying to manage these activities? I can tell you no. So those efficiencies, those corrupt practices, those lack of efficiency actually led us back to when we began to have those gaps and those gaps now created an opportunity for the government to go back to borrowing because whether you like it or not, you must continue to oil the wheel of your existence and the economy. So if the monies you are getting from your, the revenue is not enough for you to fund your budget, you have no other choice but to go out and borrow. So my issue has always been fierce countries, nobody depends on rent or when you sell crude oil to fund your budget. We are still discussing tax to GDP, which is still very low. So these are things we need to be able to, you know, expand our revenue sources. You need to be able to have multiple streams of income. We can't be dependent on oil and then all other sources are just there. So look at soliminal, not be able to do anything with the soliminal sector that we have in a country like ours, human resources, not be able to do so much with it. So my case, there are things we call we call it natural things giving to us, you know, as men, to be able to reimburse them, make more revenue from it. We have not been able to take advantage of it. So if we have to go now, we have to, you know, quickly just wrap it up because we don't have so much time on our side. But just before then, I'd like to have Professor E. Fersh here, his thoughts quickly as we close the conversation down. It's very important. Now the document says that, you know, borrowing is not the solution for us. I'd like to ask, there's a lot of argument for borrowing, just like you have stated, there's nothing wrong in borrowing as an, you know, company as an individual, especially when it's for specific costs. But my question is, if borrowing is not the solution for the Nigerian economy, do we have an alternative? What are the options that we have? No, I think they're not correct there. It's the type of borrowing that we're talking about, because it is debt financed. That's what we've been having. So that appears on our balance sheet. But when you switch to asset-based finance, it's a difference to your together. That's why I said, if you look at the budget, 205 billion Naira is expected to come from to privatization proceeds. But privatization is just one way. If NNPC, that is already in range with all the laws, enabling laws around it, and is valued at 100 billion dollars, can go to the capital market and raise 10%. That will suddenly bring 10 billion dollars on the table. And the whole equation changes. It's our asset. It's owned by Nigerians. So you say the share to people that are Nigerians, the militants, the big companies, all of that, just like NNG. NNG is giving us revenue every year. So why are you not going to get from NNPC? If you don't do this, NNPC will continue to run right on the wave of more and more borrowing to subsidize. So we've got to have their solutions. Don't tell me that we can borrow. We can't borrow. Thank you, Prof. We have to go. I'm sure we'll have some more time to talk about this. You say we can keep borrowing, but I mean, if all producing countries like Nigeria doesn't have any money coming in at all, not even one cobalt, because you're spending 123% of your budget, your income is gone. Then the issue we stop maybe and then start to think about how to fix the future. Another question I wish to ask is, what does the future hold? Are we going to go down the road of Greece in the next few years? All the chaos that we saw there. But thank you so much for your time, gentlemen. Ubonakoku, investment and economic development expert, Prof. Ken Ifair, development economist and lead consultant, echo us. We hope to have you some other time. Thank you very much. Prof. Ken That's the size of our package this morning. Prof. Ken Well, that's the size of it. Just like Ruki Kofi has mentioned, we definitely have to go now and return tomorrow. But it's okay to join the conversation because it continues on different social media spaces on Twitter, Facebook and Instagram. You can also subscribe to our YouTube channel. It's a plus TV Africa and plus TV Africa lifestyle. My name is Masih Boko. Have a great morning. Prof. Ken And my name is Kofi Bartels. Good morning.