He said Nigeria is a focal point for debt sustainability, considering that the country accounts for 50 per cent and 67 per cent of the region’s total debt and GDP respectively. This behoves us to adopt more sustainable strategies to create the required fiscal space for national development, with positive knock-on effects in other ECOWAS nations.
The DMR Chairman, Taiwo Oyedele, identified corruption in public spending, insecurity, geopolitical challenges, resource overdependency, and a shallow tax base as some major drivers of unsustainable debt. He added: “The DMR report is holistic and includes workable recommendations that, if adopted, can prevent West Africa from getting into a debt trap. Debt in and of itself is not a bad thing. It is what we do with the debt that really counts.
The report provides some background on the ECOWAS fiscal landscape and public debt portfolio, including several policy recommendations for debt sustainability and key performance indicators. It proposes a 10-Point action plan under an integrated strategy for revenue optimisation, expenditure efficiency and debt management.
ECOWAS commissioner for macroeconomic policy & economic research Dr Kofi Konadu Apraku said the main concern with higher debt loads, particularly in ECOWAS, is in its ability to create macroeconomic instability. “High domestic debt crowds out investment for the private sector, while the high cost of debt service channels revenue away from productive investments for the economy.
“Consequently, poor debt management is likely to lead to over-indebtedness and unsustainability of public debt, as was the case in the late nineties of the 20th century. This situation, we remember, was at the origin of the Heavily Indebted Poor Countries initiative from which all the ECOWAS countries, except Cabo Verde and Nigeria, benefited,” Dr Abel Essien who represented him at the event said.
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