Borrowing is a common tool for businesses and governments to drive growth and development. However, Muda Yusuf, CEO of the Centre for the Promotion of Enterprise, has emphasised that borrowing must be carefully managed to ensure financial and economic stability, avoiding potential crises that could undermine progress.
While discussing the Senate’s approval of President Bola Tinubu’s ₦1.77 trillion loan request on News Central TV’s Jasiri show on Monday, Yusuf emphasised the necessity of fiscal consolidation to manage finances effectively and avoid debt crises in the country.
“Fiscal consolidation is about how you manage your fiscal operations in a way that you don’t create a crisis, especially in the area of debt,’ he explained.
One key area is revenue generation. Yusuf argued that Nigeria is not effectively optimising its revenue streams, citing tax inefficiencies and leakages.
Many large corporations and wealthy individuals, he said, fail to pay their fair share of taxes despite benefiting from the economy.
“They are making money from this economy, and they should be able to give back,” he said, urging for reforms to ensure these entities contribute proportionally.
Another challenge lies in the underutilisation of government assets. Yusuf highlighted examples like state-owned refineries and other public properties that either perform poorly or remain neglected.
According to him, billions have been spent on projects such as refinery maintenance with little to show for it.
“These are assets that are supposed to be supporting our cash flow and liquidity,” he added.
Yusuf also pointed to missed opportunities in sectors like aviation, noting that a functional national airline could save billions spent on foreign services.
Efficient management of such resources, he suggested, could bolster national finances and reduce reliance on excessive borrowing.
Fiscal consolidation, as Yusuf explained, involves making tough but necessary decisions to optimise revenue, eliminate waste, and ensure assets are managed to their full potential.
This strategy offers a pathway towards economic stability and sustainable growth.
