Sociopolitical groups in the country have cried out over the plan by President Muhammadu Buhari to present a fresh request of $29.96 billion loan to the National Assembly, describing the move as an attempt to cripple the country.
Notable Nigerians, including civil society groups, also spoke against the move.
But the Arewa Consultative Forum (ACF) differed, saying that there was nothing wrong in obtaining the loan to fund infrastructures.
The president had hinged the request for the external loan on the need to execute key infrastructural projects across the country.
But Sunday Tribune gathered that if the request is approved by the National Assembly, the country’s total public debt will rise to $113,842,660,000 (N36.5 trillion).
According to the Debt Management Office (DMO), as of June 30, the country’s total public debt was $83,882,660,000 (N25.7 trillion).
In the same vein, data from the Central Bank of Nigeria (CBN) put the nation’s foreign reserves at $40.95 billion as of October 18.
President Buhari, in a letter he entitled “Request for the National Assembly to Reconsider and Approve the Federal Government’s 2016-2018 External Borrowing Plan,” which was read by the Senate President Ahmad Lawan, on Thursday, said only five out of the 39 projects listed in the request earlier submitted to the Senate, were approved.
He, therefore, requested the approval of the Senate for the outstanding projects, because they “are critical to the delivery of the government’s policies and programmes relating to power, mining, roads, agriculture, health, water and educational sectors.”
Although, Minister of Finance and National Planning, Zainab Ahmed, had said the country was not in any debt crisis, despite concerns being raised by a number of Nigerians and international institutions. Former chairman of Senate committee on local and foreign debts in the Eighth Senate, Senator Sheu Sani, had disagreed with the minister.
According to the former lawmaker, the previous Assembly “turned down the Federal Government’s loan request for $30 billion to save Nigeria from sinking into the dark gully of a perpetual debt trap. We don’t want our country to be re-colonised by creditor banks.”
An economist and lecturer at the Lagos Business School (LBS), Dr Austin Nweze, said unless the country reversed the trend of excessive borrowing, not only would high debt profile make it difficult for Nigeria to fund critical infrastructure necessary for development, but also that investors would be discouraged from putting their money in the country, because return on investment would be paltry.
Sunday Tribune’s findings revealed that high debt profile has slowed down the nation’s development. Before the debt forgiveness of 2005, Nigeria spent over $32 billion on debt servicing.
However, between 2010 and 2019, a period of 10 years, Nigeria spent a total of N11.274 trillion on debt financing, which is 18.5 per cent of the N61.063 trillion budgeted over the period.
In the same period, the country voted N4.413 trillion (7.2 per cent) to education and N2.772 trillion (4.5 per cent) to health.
According to available statistics, out of the N5.160 trillion appropriated in 2010, N517.07billion was allocated to debt financing. The sum increased to N527.2 billion in 2011, N559.58 billion in 2012, N591.76 billion in 2013, N712 billion in 2014 and N943 billion in 2015.
In 2016, budgetary allocation for debt servicing increased to N1.48 trillion. In 2017, it was N1.84 trillion. In 2018, it was N2.014 trillion and in 2019, N2.09 trillion was allocated to debt servicing.
In 2010, N49.09 billion was allocated to education. This increased to N306.3 billion in 2011, N400.15 billion in 2012, N426.53 billion in 2013 and N493 billion in 2014. In 2015, N392.2 billion was allocated to education. It was N369.6 billion in 2016, N550 billion in 2017, N605.8 billion in 2018 and N620.5 billion in 2019.
Health got allocation of N164billion in 2010, N235.9billion in 2011, N282.2billion in 2012, N282.5billion in 2013, N264.4billion in 2014 and N259.8billion in 2015. In 2016, N250.1billion was allocated to health. In 2017, it was N377.4 billion, N340.45 billion in 2018 and N315.62 billion in 2016.
It’s final attempt for Nigeria’s bankruptcy –Afenifere
Pan-Yoruba sociopolitical group, Afenifere, said the fresh attempt by President Buhari to represent $30 billion loan request for approval of the National Assembly was “final attempt to bankrupt Nigeria.”
Afenifere stated its opposition on Saturday through its spokesperson, Mr. Yinka Odumakin, who spoke on telephone with Sunday Tribune, even as the group condemned the spate of borrowing by the Buhari-led government.
It described the spate of loan taking as unprecedented “without anything on ground to show for all the money they are borrowing. Who will repay these loans?”
The group said “the most unfortunate thing is that you cannot see anything on ground to show for all these monies they are borrowing, nothing to show. It’s most unfortunate.”
The pan-Yoruba socio-political group’s chieftain lamented that for a government that had continued to rely heavily on huge borrowing with nothing to show for it and in the absence of any strong opposition, it was “difficult to call on this rubber-stamp Senate not to approve such fresh loan request.”
Loan request embarrassing –YCE
Also, the Yoruba Council of Elders (YCE) described the request as embarrassing and a misplaced priority.
Secretary General of YCE, Dr Kunle Olajide, while speaking with Sunday Tribune in Ado-Ekiti on Saturday, said the Federal Government should focus more on reducing the recurrent expenditure rather than increasing “the nation’s huge debt profile.”
“For a developing country like Nigeria, we must not spend more than 40 per cent of our revenue on recurrent expenditure. But now, we spend about 80 per cent on recurrent; this is very bad.
“Also, we must diversify the economy. Up till today, oil still remains the mainstay of our economy and you know we have no control over oil. I want to believe it is an unwise decision from the Presidency,” he said.
It’s another attempt to defraud Nigerians –Middle Belt groups
But sociocultural groups in Benue State, Mdzough U TIv, Okpa’K’ Idoma and Omi’ Ngede, said the development was a plan to put the nation in perpetual slavery.
Spokesman of the groups, Chief Edward Ujege, expressed worry about the insistence of the Buhari-led government to take the loan earlier rejected by the Eighth Assembly. He warned the National Assembly not to give a nod to the plan.
Ujege said the reason he was rejecting the plan was that the money, if procured, would not be channeled to developmental projects.
“It is unfortunate that the crop of politicians we have are not patriotic. They only consider their pockets. With all the huge money the nation had borrowed, what is on ground to justify the loans?
“It is only in this country that the National Assembly would be struggling to have constituency project, whereas in advanced nations, it is not the responsibility of the legislature to handle projects. It is to make laws.”
CSOs say loan request spells doom for Nigeria
Civil Society Organisations (CSOs) also said granting the request would spell doom for the nation. Lead consultant of Centre for Social Justice (CSJ), Eze Onyekpere, described the request as irresponsible, saying it negated fiscal responsibility Act.
He said for the Senate to consider the proposal would amount to height of irresponsibility by the legislature.
Also, convener of the Take Back Nigeria Movement, Jaiye Gaskiya, said “we actually have a government that claims that it has plan for infrastructural development, but has no plan in place in terms of how it would be achieved.”
ACF backs president
But the Arewa Consultative Forum (ACF) said there was no harm in obtaining loans for execution of “developmental projects that have direct bearings on the lives of citizens.”
The apex Arewa socio-cultural body maintained that, “this is because even in businesses, loans are used to improve performances.
Secretary General of ACF, Anthony Sani, said “I recall the last term of this administration, the economic experts assembled by the vice president advised that the economy be reflated with massive construction of infrastructure and that the value of the naira be upped through massive influx of forex.
“That was good piece of advice. But what was lacking in the advice was the needed clarity about sources of funding. The problems with past loans were managerial imperfections that came with corruption. As a result, the desired results for the loans did not come to pass. That created situations where the nation had to pay for loans that did not deliver the desired results.