Bimbola Oyesola, Uche Usim, Chukwudi Nweje and Sunday Ani
Nigerians yesterday vent their spleen on the upper legislative chamber over its approval of a $22.79billion external loan programme submitted to it by President Muhammadu Buhari.
They expressed shock that the borrowing plan earlier been rejected by the Eighth Senate headed by Bukola Saraki’s, for its lack of details and clarity was surprisingly approved by the 9th Senate presided over by Dr Ahmad Lawan.
President Buhari had told the Senate and Nigerians that the loan would be used to fund critical infrastructure projects under the 2016-2018 External Borrowing Plan.
But reacting to the Senate loan approval, former governor of Anambra State, Chief Chukwuemeka Ezeife, expressed worry over the Federal Government’s penchant for foreign loan for an economy that is still struggling and largely dependent on crude oil sales for revenue.He warned that the government should stop accumulating foreign debts for generations unborn while urging those negotiating the loans to equally remember there would be a repayment day. They must also be ready to justify what the money will be used for.
“As it is now, we don’t understand what the money is to be used for,” he said.
He hinged his concerns on the fact that most of the loans taken by the government in the past were not properly used for the purpose they were borrowed. “We have seen that the ones already borrowed and used were not fairly deployed. So, no nationalist will be anxious for new foreign debt at this stage,” he submitted.
For his part, former governor of old Kaduna State, Alhaji Balarabe Musa, described the Senate’s action as unfortunate, as he said the money would be embezzled by the people negotiating its collection. He came down hard on the country’s law makers whom he lamented were not strong enough to stop the Federal Government from taking the loan, which would certainly be stolen and taken into private pockets.
Musa said “It is unfortunate that the patriots in Nigeria are not strong enough to stop the government from taking this loan which everybody knows will be stolen. The loan will be stolen; it will not be used for any project. There is no doubt about it and everybody knows so,”
The former governor equally wished that the foreign countries would not grant the loan to Nigeria adding however that they would certainly grant it so as to be able to keep Nigeria under their control at all times.
Also commenting, spokesman of the Afenifere Renewal Group, Yinka Odumakin, described the approval as a license to bankrupcy for the Nigerian economy.
He said: “In three years, this administration has borrowed more than what the country borrowed in 30 years without any result to show for it. So, the Senate approving this wanton loan request is like they have rubber-stamped Nigeria into bankruptcy for years to come, because these loans are not repayable and when this country becomes substantially bankrupt and unsalvageable, we will remember this Senate for giving its approval for the total bankruptcy of Nigeria.
Meanwhile former President of Aka Ikenga, Goddy Uwazuruike, the lawmakers did not scrutinise the request thoroughly because there is no clear cut description of what the loan would be used for.
He described the Senate’s action as unfortunate, saying, “The curious thing here is that there is no clear-cut description of what the loan will be used for. We have a Senate that refused to scrutinise the loan request. The Senate ought to have ascertained our actual debt profile, our repayment plan, and of course, what the loan will be used for. Hitherto, our loan has ballooned in such a way that generations yet unborn will be hamstrung with a crippling loan burden.”
For its part, the Lagos Chamber of Commerce and Industry (LCCI) said that the capacity to service Nigeria’s current stock of debt raises serious sustainability concerns.
The Chamber’s Director General, Muda Yusuf, told Daily Sun that Nigeria’s rising national debt is a cause for concern as the debt profile has grown from N12.6 trillion in 2015 to N26.2 trillion in third quarter 2019, an increase of 108 per cent.
“An additional $22.7 billion borrowing would bring the total debt stock to $108 billion, although 15 per cent of this are debts owed by the state governments,” he said.
Muda lamented that Nigerians and businesses will be at the receiving end as the opportunity cost of high debt service commitment for the economy and citizens is already very high.
The LCCI boss said there is a need to clarify place of the new loan request in relation to the 2020 budget and the 2020 -2022 medium term expenditure framework.
He said, “For instance, the debt service provision in the 2019 budget was a whopping N2 trillion; whereas the total capital budget was N2.9 trillion; this implies that the debt service commitment was 70 per cent of capital budget allocation.
“Debt to revenue ratio was about 30 per cent, which is also on the high side. In the 2020 budget, the total revenue could barely cover debt service commitment and recurrent spending.
“There is also the exchange rate risk inherent in the exposure to mounting foreign debt which we need to worry about. As the currency depreciates, the burden of servicing foreign debt would intensify. This is a major problem with increasing the stock of foreign debt.”
Yusuf said the trend underscore the imperative of appropriate policy choices to attract equity domestic and foreign private sector capital for infrastructure financing.
According to him, the government needs to look beyond tax credit in its quest for complimentary funding sources for infrastructure.
He added, “it is important to stress that borrowing should strictly be in line with the relevant provisions of the Fiscal Responsibility Act.”
Commenting on the development, the Lead Director, Centre for Social Justice, Mr Eze Onyekpere said for President Buhari to have made a request for $22.7 billion loan means he does not have the grasp of what simple governance entails. He also knocked the National Assembly for approving it.
“What does he need the money to do? This is a disaster. What manner of President is this?
“After he has introduced the Finance Act to tax Nigerians more as a way of raising revenue? Yet, he wants to spend an additional $22.7 billion loan?