By Fola James
President Muhammadu Buhari administration’s penchant for borrowing knows no bound, watchers of this government have said.
His government, critics say, could end up the biggest debtor, even though the administration says borrowing could free up more funds to bridge the infrastructure gap in the country.
The misgiving among Nigerians has been further echoed by world financial body IMF, which warned that the nation’s debt to GDP is moving to an unacceptable level.
“Nigeria’s debt has increased but the level is way below the average for the region.
Even if we include the CBN overdraft and others, we are talking about a debt to GDP ratio that does not go beyond 27 to 28 per cent to GDP and that is including AMCON overdrafts and others,” Amine Mati, IMF Senior Resident Representatives and Mission Chief for Nigeria at a recent event in Abuja, the nation’s capital.
The debate over Nigeria’s rising debt came on the crest of recent request President Buhari sent to the Nigeria Senate to borrow $29.8b.
In November 2016, the Eight Senate under the leadership of Bukola Saraki had rejected the request on the basis that it will further increase the nation’s debt burden.
But three years after, the president said the Senate should not deny government the needed loan because it’s required to develop “39 emergency projects in the Power, Agriculture, Transport & Mining sectors of the Nigerian economy.”
Buhari said in the letter cited by the magazine titled: “Request for the National Assembly to reconsider and approve the Federal Government’s 2016-2018 external borrowing plan,” for rapid infrastructural development in the mentioned areas.
According to the president “Pursuant to Sections 21 and 27 of the Debt Management Office (Establishment Etc) Act, I hereby request for resolutions of the Senate to approve the Federal Government’s 2016-2018 External Borrowing Plan as well as relevant projects under this plan.
Specifically, the Senate is invited to note that (a): While I have transmitted the 2016-2018 external borrowing plan to the eight National Assembly in September 2016, this plan was not approved in its entirety by the legislature. “
The president said further that “Only the Federal Government’s emergency projects for the North East’s four states projects and one China Assisted Railway Modernization Projects for Lagos-Ibadan segment were approved out of the total of 39 projects.”
Therefore, he requested “That outstanding projects in the plan that were not approved by the legislature are nevertheless, critical to the delivery of the government’s policies and programmes relating to power, mining, roads, agriculture, health, water and educational sectors.
These outstanding budgets are well-advanced in terms of the preparation, consistent with the 2016 date.”
He said statutory bodies in the country have given approval for the loan because “Sustainability analysis undertaken by the Debt Management Office were approved by the Federal Executive Council in August 2016 under the 2016-2018 external borrowing plan.”
Necessary documents have been attached for perusal, the president said in the letter, adding that the minister of finance will provide detailed information.
“I have attached for your kind consideration, relevant information from the Minister of Finance, the specific outstanding projects under the 2016-2018 external borrowing plan for which legislative approval is currently being sought.
I have also directed the Minister to make herself available to provide any additional information or clarification which you may require to facilitate prompt approval of the outstanding projects under this plan,” Buhari said.
But his critics said borrowing the $30b will unbalance the required threshold of 27 to 28 GDP level, making it the highest in the sub-region.
The approval could also see Nigeria’s debt rise to over $110 billion since President Buhari took over government in 2015.
The Debt Management Office, DMO recently said Nigeria’s debt profile has risen to $81.27 billion or N24. 947 in the first quarter of 2019: an increase of 2.3 percent as at March 2019.
Critics of Buhari’s government said the nation’s total debt has risen astronomically since he took over from Goodluck Jonathan.
