The Managing Director of the Nigeria Sovereign Investment Authority (NSIA), Mr. Uche Orji on Tuesday said that debt is not a bad concept if such borrowed funds are channeled into revenue yielding ventures.
He stated that funds should be borrowed for investments in revenue-yielding projects, and not for consumption.
Orji spoke in Abuja at the BusinessDay Breakfast Meeting on Macroeconomic Outlook: Innovation and Technology.
Data released by the Debt Management Office showed that
Nigeria is experiencing a worsening debt level as the country’s indebtedness rose by N2.5trn between July to September this year.
The country’s debt burden was revealed on Tuesday by the Debt Management Office.
Nigeria’s debt has now hit a record high of N38trn or $92.626bn as of the end of September 30, 2021.
But Orji said Nigeria like many other nations should borrow like a rich man, to drive returns, not as a poor man who borrows to consume.
Prodded by journalists about his views on debt challenge, Orji said, “I have a very different philosophy to debt. I believe, as a country, if you want to borrow, you borrow big, you borrow to invest, you borrow to drive returns.
“How many of you know the GDP of Malaysia? It is about $380bn. How many of you know the foreign debt of Maylasia? $200bn. GDP similar to Nigeria, about $384bn to about $400bn. External debt is about $200bn. The difference, Malaysia invests that money in things that produce revenue.
We shouldn’t borrow like poor men. Poor men borrow to eat, poor men borrow to pay school fees, poor men borrow to survive. Rich men borrow to invest.
“So our philosophy of borrowing has to change. As a country, if we want to borrow to undertake gas industrialization. If we want to borrow to build 10 Indoramas and we want to go out to borrow $25bn or $30 billion why not? Because those things will generate revenue.”
On his view of using technology to drive the economy, the NSIA boss advocated for a centre of excellence to train Nigerian experts in various sectors, in order to drive the nation’s socio-economic development.
“I am advocating for a Centre of Excellence. And I believe that the Centre of Excellence should be able to pull everyone else gravitationally up. We must. It could be privately owned or government- funded.
“I don’t know what works, but I know what has worked elsewhere. We don’t have the critical mass in most sectors at home. You must have heard about people going to Canada. Let them go.
“It is important because, hopefully, one day, they will bring back necessary expertise to contribute to the economy of this country. We cannot afford to compromise the base quality, but we have done so consistently.”
He cited the example of Taiwanese experts from Massachusetts Institute of Technology (MIT) who returned to their home country and positively impacted on its economy.
“Since I left University of Port-Harcourt, I don’t know anybody who has completed a five-year engineering course in five years. I may sound like I am frustrated by it.
“But really, I am frustrated by it. At the end, we are all going to suffer for it. We are all going to suffer from half-baked doctors, we are going to suffer from half-baked engineers and we are all going to suffer from half-baked scientists.
“We must solve this problem of inconsistent, poor quality education. If we don’t, we cannot innovate. If we don’t innovate, we cannot survive”,Orji said.