Can future Productivity Solve our Debt Problems?

[kingstep]

If you look at how indebted we are and think of the possibility of coming out of it in the future, it always look unrealistic. Government often assume that future growth will offset present borrowing but that doesn't always look like the truth.

What if technological productivity and better governance increases while wages and tax revenues fails to keep pace? what if a change in administration struggles to fix our debt problem? and what if an attempt to fixed our indebtedness even takes us backwards?

Is it even possible that our growth and fiscal stress can exist simultaneously?

[Curious T]

Nigeria has many problems, but its debt is not part of them. Being in debt is not a sign of a badly run country or business. It's what you do with those debts that determines how a country is run.

The problem is that the country is not productive. The money coming out of the country is not creating more money. The money should be able to circulate around and create more employment, businesses and innovations. Even though we were not in debt, as long as the country is not productive, we would still be a struggling nation. In Nigeria, loans are taken for consumption, but they should not be. When a country takes a loan, it should be to use for a project that would be productive because that loan should be paid from the proceeds of that project. You can't take a loan to build a government house or presidential villa and then pay back the loan from another revenue stream. That is the quickest way to sink a country, and that is the situation Nigeria is in right now.

If a country like Nigeria decides to take a loan and use that to fix its electrical crisis, that loan can be paid back from the revenue generated from the electricity. But we live in a country where if $1,000 is borrowed, politicians and other government officials will first share about $800 amongst themselves.  Then the remain $200 won't be enough to fix the problem.
Being in debt is not the problem; the most successful countries are in debt too. It's how those debts are used, financed and paid back that is the problem.