FORMER Vice President, Atiku Abubakar, on Friday, stated that Nigeria experienced an unprecedented economic boom with a 6 per cent annual growth and paid off its debt when former President Olusegun Obasanjo and himself managed the nation’s affairs.
In a Twitter post, he described the period between 1999 and 2007 when he served as vice president of the country as a time of national restoration for the country when the country was without debt.
“Between 1999 and 2007, Nigeria paid off her entire foreign debt while maintaining an unprecedented 6 per cent annual GDP growth.
“Those were periods of national restoration, and I am very proud of the work President Obasanjo and I did for this nation we care so much for. Facts don’t lie,” he tweeted.
But this is not a true statement, according to the data published by the Debt Management Office, DMO, the government’s agency that keeps records of Nigeria’s debt portfolio.
Nigeria’s debt history according to DMO, shows that the country was indebted to external sources to the tune of $28.04 billion in 1999, of which $20.5 billion was owed to the Paris Club of creditors.
The data also reveals that while the debt owed the Paris Club was paid in 2006, following a debt relief program approved by the World Bank. The country’s external debt was $3.54 billion and climbed to $3.65 billion in 2007.
The country’s external debt profile continued to rise to $10.72 billion in 2015 Currently, the debt stands at $27 billion as of March 2020 under President Buhari’s administration.
An indication that the country’s external debt profile had increased by more than 50 percent under Buhari administration.
Nigeria though had a fair share of economic boom recording a positive growth rate between 1999 to 2007. According to the World Bank, the country had a stable economic growth during the period recording 5.02 percent in 2000, 5.92 percent in 2001, 7.35 percent in 2003, 9.25 percent in 2004, 6.44 percent in 2005, 6.06 percent in 2006 and 6.59 percent in 2007.
However, President Buhari’s administration has endured a turbulent economic growth registering Nigeria’s first recession after 25 years in 2016, due to lower revenues from a drop in crude oil prices.
Data obtained from the World Bank showed that the GDP growth rate dropped from 2.04 percent in 2015 before it dropped to -1.62 percent in 2016. The growth rate increased to 0.81 percent in 2017, it slightly increased by 1.94 in 2018 and increased by 2.24 in 2019.
When the GDP growth rate of a country is negative, then the economy of that country slides into recession. Key indicators that drive a nation’s GDP growth include its consumer spendings on goods and services, business investments in the country, government spendings and its net trade.
Nigeria is currently not listed as the fastest growing economy in Africa with a paltry 1.94 percent GDP growth rate, lagging behind Ethiopia at 10.3 percent, Ghana at 8.1 percent, Cote d’Ivoire at 7.7 percent, Tanzania at 7.1 percent, Senegal at 7.2 percent and Djibouti at 7 percent.
A PriceWaterhouseCoopers, PWC, report affirms that Nigeria’s economy grew by 2.7 percent in 2015, but slide to its slowest growth in the past four years, much lower than its previous GDP average growth rate of 4.8 percent.
Nigeria’s domestic debt has also grown to $56.72 billion, bringing the total public debt which comprises of debt of the Federal Government, the 36 States of the Federation and the Federal Capital Territory (FCT) to $83.88 billion.
Saudi Arabia with a GDP of $577.6 billion was the 20th largest economy in the world in 2011, though, a PWC projection stipulates that Nigeria could attain that level of GDP growth by 2023 assuming other economies are stagnant if its GDP growth annually surpasses the 10 percent mark.
The World Bank predicts that Nigeria’s population is expected to rise to 410 million by 2050 while 94 million people live on less than $1.90 a day but the GDP is growing at a less consistent rate, averaging 1.4 per cent since 2016.
This suggests that Nigeria is exposed to global economic shocks due to its significant debt accumulation, import-dependent economy and low diversification of exports
Amos Abba is a journalist with the International Center for Investigative Reporting, ICIR, who believes that courageous investigative reporting is the key to social justice and accountability in the society.