 Welcome back and so the breakfast and plus TV Africa this time around will be focusing on Nigeria's economy. Now the nation's public debt is set to exceed 50 trillion narrators yet representing a 29.8% increase above the 39.56 trillion narrow at the end of 2021. Now according to the debt management office DMO, the latest data that is, the national public debt rose by 20% year on year till 39.56 trillion narrate in 2021 from 32.9 trillion narrate in 2020. Now the 20% rise in the total public debt was driven by a 25% increase in external debt and 17.3% increase in domestic debt while total external debt rose to 15.86 trillion narrate last year from 12.71 trillion narrate in 2020 domestic debt rose to 23.7 trillion narrate in 2021 from 20.21 trillion narrate the preceding year. Now further analysis showed that most of the increase in the public debt in 2021 was occasioned by the federal government's borrowing activities. Consequently the federal government's total debt rose by 22.8% or 6.51 trillion narrate to 33.12 trillion narrate. Now economists Mokhtar Mohamed joins us now on this discourse. Good morning to you Mokhtar, thanks for joining us on the breakfast as we look at these issues bordering our economy. Good morning. All right so let's talk about Nigeria's public debt. It's as though we are sounding like broken records if I may say because over time we know what the issues are you know we keep on borrowing we keep on mounting a whole lot of debt and it's as though we are mortgaging our children's future it's as though that as though we we just don't care what happens in the future is just to sort out the issue of now why can't we move beyond this huge debts? I think it's because the the government is not releasing things out of the we are doing same thing all over again and we expected different results. I think that is a major problem debt in itself borrowing in itself is not an issue but you have to borrow knowing fully whether you'll be able to pay the challenge with Nigerian debt is that the government keep reminding us that our debt to the GDP is what is very normal but remember GDP does not pay your debt it's your your revenue that you can pay your debt it's like a man working in a good company and saying that oh the company and working is very good and then you are collecting debt and yet your salary from that company cannot pay your debt so it's all about being strategic and knowing what really we are borrowing for this administration came in with a good borrowing plan but along the line I think they missed it. So what exactly we're doing wrong at this point in time because if you look at the statistics and the reports we're looking at heating 50 trillion nair. No, 53 trillion nair is not what Nigerians cannot pay for but what it means is that we will not even have money for capital projects and knowing that our budget about 80 percent of our budget is for recurrent expenditure. So what we should be looking at is that the government that knows what to do wants to begin to say I can reduce the cost of governance and then instead of borrowing for Abuja Kaduna, the Kano Kaduna, Lagos, Ibadon, Onitsha, Enugu. What we should be doing is we should be using those projects as equity so that we can do the PPP and then with that PPP then the government will not be spending so much. All right Moqta, over time we've talked about you know looking inward and you know generating more internal revenue from the country but over time the issue has always been that we are just one side and we're always focusing on you know oil you know we're just a mono economy. Yeah because we are not strategic in our thinking and the only time we talk about diversifying the economy is when the price of oil is down. Once the price of oil goes up, we forget about diversification, we go back to our normal ways of doing things especially when the revenue from oil is coming in. Unfortunately this time we are having it because the revenue of oil has actually gone up I mean in terms of the price of food has gone up and because our refineries are not working a lot of things are not being done well so we are having the challenge of trying to meet up especially what we gain in the high price of food oil we lost it in the area of subsidy payment. So with that we are not thinking inward. Now what do you think inward? You think about revenue generation. Now how do you think about revenue generation? You think of two ways here either increase taxes or you use taxes as a means to attract investment and those investments will increase jobs and those jobs and those companies will not pay their taxes. Unfortunately we see no looking at that what we think about our own tax is how to get tax for revenue. We are not thinking about how can you start to grow our informal sector which will be a cash cow in the area of revenue. So until we do that we keep on going to the simplest ways which is I mean the simple form of borrowing which is going to borrow from international vendors but they are always ready to give it to us because they know that our assets even in terms of our food oil is able to pay those debts they don't think about how we wish to do other projects in the nation. So I think the government should begin to think out of the box then something like I said instead of you just looking at those those projects and say oh the government want to do it with borrow money why can't you do the public private partnership like it's done all over the world whereby the government now use those projects as an equity to attract the public the private companies to come and buy into that and maybe and finish that project and you give them to the five years to recoup their money that they are spending on those projects and after they recoup their money then you take it from there and then your credit job you remember that this company will see pay tax from the revenue they are generating so it's a win-win situation for both for you and especially for the government so you have more money to put into social investment like education and healthcare. All right Mooksa we'll come back we'll take a quick break now we'll come back and talk about the finance act of 2021 how we can actually explore that to deepen the economy it's still the breakfast and plus tv africa we'll take a quick break and return with more to join us again. All right welcome back it's still the breakfast and plus tv africa and we'll still have Mookta Muhammad an economist joining us as we look at the issues in our economy vis-a-vis the rising death profile of the nation's economy. Mookta just before we went on that break we're talking about you know tax legislation and how we can actually explore all of that you know to show up all of this and you know deficits that we have. What would I thought that would finance act of 2021 would have actually explored that to the extent that we can be getting more or driving more revenue from or driving more people into the tax net? Well getting more people into the tax net is not it's not orchestra science but again when it comes to tax payments you must have the structure so what are those structure that used to capture those in the tax bracket? It's not just by going to an office and feel that this office have a very good building that is where they're making a lot of money so you cannot give them taxes because the some of them just happen the government just come and clamp down on the company and just give them a strenuous that is how much you are going. They lack structures to do that so if we really want to do tax payment then we need to begin to look at building the structures and so that is one then secondly you need to build structures for the informal sector because the situation whereby the informal structure provides practically everything for themselves you don't think such people will not come voluntarily to begin to pay tax so but when you build infrastructure for them you attract them to say this is what we have done for you. So by buying and vowing this you should be able to pay your tax so that we can do more that is how so that is how we can attract the informal sector. The informal sector in any economy at the largest tax bracket we call it talk about the informal sector like in Nigeria you'll be talking about the woman that is selling something on the one that have the parking saloon the man that the woman that have a headdress in saloon even the man that rides on or cut down the route that you took. There's a lot of the Kekena pep the downfall driver these are the informal sectors so how do you attract them you create revenue and then you build structures so by that you'll be able to they will be able to say okay we need to pay our tax so that government can do more for us but whereby the informal sector provides properly everything for himself and you're not telling him to come and pay tax it's already the difficult thing to do. All right Mohtak Mohamed let's also look at the fact that if you look at the Buhari administration I mean if you look at this government it feels like we have tripled you know the debt profile compared to the previous government and not to make any kind of blames but on on the long run you have the government running this budget deficit I mean we've been running on this for a very very long time even when you have the oil prices on a high I mean we are very dependent on oil prices the economy is a mono economy so we're highly dependent on the exchange from you know oil proceeds however you want to put it so even when the prices are high we're still running the budget deficit and that's what the government has been doing over time consecutively why is this the situation? Because we are running a deficit number one because our revenue is low now that you're talking about the price of oil going up remember like what I said we are now paying more on more on subsidies because when the price of food goes up that means the price of the cost of subsidy goes up initially the government was budgeting about three trillion but at the last time the president have sent a budget of four trillion to the national assembly so that's an increase of about one trillion naira so that is a major challenge so the rising price the rising cost I mean the rising price of goods is not good news to Nigeria because we are seeing a nation that depends upon almost 80 to 90 percent of a refined petroleum product outside the issue of this country so that is basically all the challenges Alright Mukta there's also the talk of this issue of fuel subsidy which has actually resulted in the government of a budget request of 2.56 trillion naira to fund fuel subsidy from July to December of this year how do we get past this? The only way we can get past this is if the refineries are working one then secondly if the government also will take a call on their revenue now how do I say they take a call on their revenue remember that when these products land the Nigerian port as well as enter the Nigerian water there's a lot of charges that have been charged by government agencies NEMASA, NPE, the revenue commission a lot of charges come in are government ready to take a bite on their revenue that will bring down the cost of the petroleum product that could indirectly then you will remove subsidy then the cost of refined product will not be too high it was the comrade governor then that that man said that immediately the product hit the Nigerian water the cost goes up by almost 30 percent so government need to look at that to take a chunk to not just pushing everything to the people so by the time we do that you will be able to remove subsidy on petroleum product without the astronomical rising price in the price of refined petroleum products but if you do it as it is now with the cost of higher price this high will the government not ready to take a bite on their revenue you could see the price of good oil I mean the price of refined petroleum products going as high as 400 and that will probably already be published in Nigeria so basically that's the challenge so would you also agree talking about the challenge now and you have a lot of experts I mean your colleagues who were saying that Nigeria is faced with a double challenge of low revenue revenue base and also a huge infrastructural gap is that really a current reality that is the current reality but like I said government is not thinking like what all governments are all government all over the world are thinking now most government all over the world are not thinking about PPP remember the america infrastructure that was that was just passed by the current president by Joe Biden it's all about PPP no government is ready to put all his revenue into infrastructure what did you try to partner with the private sector we have seen that happen in their papa route up to up to the the the the house to a battle yeah I mean not a battle to the two gates in Lagos it's being done by a company so we see the second Niger beach also being undoed by Nigerian southern westbound and then the government partner in it so so what you do is use the PPP so what happened the PPP is that the private sector builds those infrastructures for you and manage it for a number of years and to recoup their money that they spend in there the if the private sector is not going to manage it for a number of years then you give them tax brackets for numbers of years for them to recoup what they have spent on infrastructure we see that also going to happen in the in in the multilambular main international airport that was recently commissioned by the president that was a PPP project so you need to begin to look at PPP especially when you don't have enough to carry out this project because of your revenues short for but okay just just before you know Justin comes in a typical example I mean we won't see how effective the PPP system is because we have states or maybe a state in Nigeria that has been very strong on the PPP I mean I would talk about the cross-evalued state government signing the PPP you know being part of the PPP arrangement and if you look at the state right now there's really nothing to write them about so how effective is the PPP arrangement do we also the PPP arrangement that cross-evalued state goes into was not implemented by the incoming administrations that was what happened remember the PPP arrangement you're talking about I'm sure you're talking about the TINAPA no beyond the TINAPA I mean if you probably get all of that signing an agreement that you would have some PPP arrangement over time you hear the government saying we're partnering but at the end of the day there's almost nothing to show for because they are they are not doing it sincerely look we have seen the PPP now work did you see it work we see it work in the NAPAPA routes up from from NAPAPA as far as Bojidubega we have seen that work because government have decided to be sincere in that we see the PPP also work in the second Niger bridge it's been somewhere in the Nigerian sovereign wealth fund with the government bringing some part of the funding I just mentioned the Mutala Muhammad International Airport that was just commissioned now the terminal that was just commissioned now that was the PPP arrangement okay remember Mutala Muhammad II MMM II the local that's the PPP arrangement and it's still working so what happens if the PPP arrangement does not meet you know sincerity of the uh the elites the ruling class let me tell you why it doesn't mean because every ruling record every new administration wants to have a chunk of cake because of corruption because government is supposed to be a continuous process but when they come in there they get to put a lot of demands on the PPP that is the background of why you see some of this thing does not do not do not succeed go and confirm it's corruption that's why you have no reason not to succeed an agreement have been put in place the private sector have committed their resources to it the only PPP that the federal government has entered that did not succeed remember it was a legacy bad on expressway and like you said it was given to an elite that was not even an engineer but when the government said that it was not going to suck it they took it from him and they took it themselves and they have been doing it now and now what are they going to do in the road they're going to tow that route so it all depends on integrity and sincerity on the part of both parties but the PPP and the government especially the government because if i'm a PPP person i'm not coming there for charity i'm using my company money to develop the project i want to make profit that is capitalism all right as we just wrap up all of this now it's not just about the federal government that is involved in this you know debt profiling and everything let's look at let's look closely at the state governments for instance and because they also do their own programs they also do their own project and every other thing you know and most of the state have blessed with a whole lot of resources that they could explore to you know build your own state why are they not looking in that direction okay number one when you talk about resources remember that no state government own any resources in this country that is one of the issues that we have government because of the constitution so that is a constitutional problem sometimes you will not blame the state government the only time you need to look at the state government is how much of infrastructure have they been able to do in your state to begin to tax their tax business is there so most of the government are not doing anything and so they are not ready to put the body more on the people and some of them also speak government as a social investment they don't think government as what you use to generate revenue how many states can really stand on the side if they don't go to the federation if i mean we're just released of recent that almost 24 states did not attract a single foreign direct investment because there's no there's no specific project or they are not even thinking on how to bring in projects they're always depending on the federation accounts a state like Lagos one Lagos is thriving is because of the private companies that are most located in Lagos so they were able to generate internet generated revenue even if you have to question sometimes the way they go about it so states that can begin to do that should begin to provide look at Lagos Lagos is trying to improve security and even partner with the private sector to improve security they were trying to build infrastructures for the business is to grow look at power it's not that it's not like Lagos cannot provide their own independence power plant but the Confucian does not support it so sometimes when it comes to revenue from the side of the government it's not just because the government are not thinking about the boss but because there's a constitutional issue all right thank you so much and Mokhtar Mohammed for all of the thoughts that you have shared with us and how we can improve on what we have and not mortgage the nation and our children's future as regards at the rise in that profile would you appreciate your time Mokhtar? my pleasure thank you all right it is still the breakfast on plus tea Africa will take yet another break and this time around when we retail we'll be looking at the 35 percent affirmative action for women in a moment to join us again