Borrow to invest, not consume – NSIA boss tells FG

With growing agitations against the Federal Government’s huge borrowing appetite, the Managing Director (MD) of the Nigeria Sovereign Investment Authority (NSIA), Mr Uche Orji has said the Federal Government can borrow to invest rather than to consume. There is little evidence to show that over $30 billion of Nigeria’s external debts has been invested. The […]

With growing agitations against the Federal Government’s huge borrowing appetite, the Managing Director (MD) of the Nigeria Sovereign Investment Authority (NSIA), Mr Uche Orji has said the Federal Government can borrow to invest rather than to consume.

There is little evidence to show that over $30 billion of Nigeria’s external debts has been invested.

The NSIA MD spoke at the Businessday Breakfast Meeting on Macroeconomic Outlook: Innovation and Technology, in Abuja on Tuesday.

As of 31 March 2021, Nigeria’s external debt stock was about $32.9 billion. Nigeria’s total public debt was about $87 billion. Domestic debt represented 62.3% of this and external debt 37.6%.

Mr. Orji said whilst the Federal government can borrow more, the borrowings must be invested in revenue-yielding projects so the debts can repay themselves. 

He said Nigeria should borrow like rich men who borrow to invest and not like poor men who borrow to consume.

He 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,” he said. 

“How many of you know the GDP of Malaysia?  It is about $380 billion.  How many of you know the foreign debt of Malaysia?  $200 billion. 

GDP similar to Nigeria, about $384 to about $400 billion.  External debt is about $200 billion.  The difference, Malaysia invests that money in things that produce revenue” he stated. 

“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 Indorama’s and we want to go out to borrow $25bn or $30bn why not?  Because those things will generate revenue” he stated further.     

He also disclosed that the NSIA is investing hugely in the technology space to drive innovation saying countries that have exceeded have invested hugely in technology. 

“This morning, we just concluded one of many investments we are making, we just banked ventures platform, I think we will be announcing it soon, it’s a $40 million tech fund that looks at new ventures in Nigeria and NSIA is the leading investments in that.”