The Debt Management Office (DMO) has expressed displeasure over the non-generation of revenue by roads to service debt used for construction and rehabilitation of the roads, stressing that the country’s debt service to revenue ratio is a major issue of concern.
Stating these at the fifth Budget Seminar (webinar) organized by the Securities and Exchange Commission (SEC), the Director-General of DMO, Patience Oniha stressed the need for infrastructure built with borrowed funds to generate revenue to service the debts.
According to her, “We have done the Sukuk, for instance, but the government is the one servicing the debt of those Sukuk.
“They (the debts) are not being serviced with revenue from those sources (infrastructure).
“I think that when we are talking about those innovations like revenue, bonds and all that, we should be talking about policies to ensure that the projects that we financed generate revenue,’’ she explained.
The government has tied the Sukuk bond to road infrastructure projects since its launch in 2017. Some of the roads earmarked for the hundreds of billions realized are Ibadan-Ilorin Road, Kolo-Otuoke- Bayelsa-Palm Road, Enugu-Port Harcourt Expressway, Kaduna Eastern Bypass, Kano-Maiduguri Road, and Damaturu-Potiskum Road.
Afolabi Olowookere, the Head of Economic Research and Policy Management Division of SEC, said the current system where the government appeared to be the major financier of infrastructure projects was unsustainable.
Olowookere suggested that an adequate cost recovery system be adopted for any infrastructure to be revenue-generating.
