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General News of Wednesday, 15 September 2021


Fury over FG’s plan for fresh loan

President Muhammadu Buhari President Muhammadu Buhari

Angry reactions have trailed President Muhammadu Buhari’s fresh request to obtain a foreign loan.

Senate President, Ahmad Lawan, had at plenary, read President Buhari’s letter dated August 24, where he explained that the projects listed in the 2018-2021 Federal Government Borrowing Plan were to be financed through sovereign loans from the World Bank, French Development Agency (AFD), China-Exim Bank, International Fund for Agricultural Development (IFAD), Credit Suisse Group and Standard Chatered/China Export and Credit (SINOSURE) in the total sum of$4,054,476,863; Euro 710,000,000 and Grant Component of $125,000,000.

He said the monies would be used to fund federal and states projects in key sectors such as infrastructure, health, agriculture and food security, energy, education, human capital development and for COVID-19 response efforts. 

He said the projects are spread across the six geo-political zones of the country and would bring about employment generation, poverty reduction and protection of the most vulnerable and poor segments of the society.

However, the main opposition party, the Peoples Democratic Party (PDP), apex Igbo socio-cultural organisation, Ohanaeze Ndigbo, pan-Yoruba socio-cultural organisation, Afenifere, the Middle Belt Leaders Forum (MBLF) and some experts condemned the request.

The PDP, in a statement, by Kola Ologbondiyan, accused the Federal Government of seeking to further mortgage the country. It noted that with the spate of borrowing, Nigerians “might eventually not have a nation and a patrimony that they can freely call their own,”  after the APC administration.

Consequently, the PDP charged the National Assembly to rise above partisan sentiments and reject the latest loan request in the interest of the country.

“With the N33.107 trillion debt already accumulated by President Buhari and the APC with nothing to show but decayed infrastructure and a depressed economy, an addition N5.62 trillion borrowing proposed by Buhari for the 2022 budget and now a fresh N2.66 trillion external loan, the APC will be hanging over N40 trillion debt on the nation, with no clear-cut repayment plan.

“More alarming is that the debts that APC is hanging on Nigerians are for nebulous projects whose scopes, utilities, locations and contractors are largely vague; a development that validates apprehensions of a huge swindle on our nation at the expense of innocent Nigerians, including generation yet unborn.

“Our party holds it as an act of wickedness that individuals who know that they will be leaving office in less than two years will be accumulating debts instead of seeking ways to reduce the liability they have brought upon our nation.”

President of the MBLF, Dr. Bitrus Pogu, accused the President Buhari-led administration of financial recklessness and noted that the future of the country was at stake given the administration’s penchant for taking foreign loans.

“It is unfortunate that the President Buhari administration is taking us deeper and deeper into debt. Is he telling Nigerians that we are still within the capacity to take loans? He is unfortunately mortgaging the future of this country. My advice to the National Assembly is to reject that loan request. We cannot mortgage the future of Nigeria because of the reckless actions of this administration. We cannot continue to take loans to fund everything.”

For National Publicity Secretary of Ohanaeze Ndigbo, Chief Alex Ogbonnia, the loan request is a disservice to the country.

“What pains me is that the National Assembly as presently constituted is so complacent and they do whatever the executive requests. If the National Assembly had been up and doing and rejected previous loan requests by the president, maybe he would have thought twice before making another request. The essence of the principles of checks and balances is to guard against situations like this. The National Assembly represents the sovereignty of the people, they should have objected to the rate at which President Buhari is taking loans because he is mortgaging the future of Nigerians.”

Also, National Publicity Secretary of Afenifere, Jare Ajayi said the borrowings have become a source of serious concern.

“The quantum of the country’s indebtedness now is in trillions while the amount of money we are using to service loans, foreign loans especially, is greater than the amount we are spending on development projects. To worsen the matter, there are no concrete indications that the monies being borrowed are availing the country of commensurate values. In other words, whereas our debt profile is rising phenomenally, what is on ground does not, in any way, justifies the indebtedness.”

•Frank Ike Onyebu, chairman, Manufacturer Association of Nigeria, Apapa branch

“It’s difficult to react to things as this because it’s getting to that point where sanity needs to prevail. How can we keep taking loan and almost the entire revenue is used to service loans. We should  sit back and look at the ones we have already collected and how we can pay back. It’s really getting out of hand. I am even surprised that countries are still willing to give us more loan. How do we pay these loans?”

•Dr. Muda Yusuf, economist

“The former director general of the Lagos Chamber of Commerce and Industry said the growing stock of debt is a cause for concern. 

“Current levels of debt are already at an unsustainable threshold.  If over 80percent  of revenue is used to service debt,  then it is about time to slow down on debt accumulation.

“From reports,  this request is  new as it was not covered in the original borrowing. It is an addendum to the original plan which had already been approved. Of course, there is merit in borrowing for infrastructure development, but even at that, the capacity to service the debt sustainably should be a critical consideration. The risk is that at this rate, part of the borrowing will inevitably be used to fund recurrent expenditure.  Already,  actual revenue can hardly cover recurrent budget.  The risk of ending up in a debt trap is quite high.”

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