Unic Press UK: The Nigerian President, Muhammadu Buhari, has tabled a request before the National Assembly seeking for an approval to borrow $29.96 billion.
The President said that the funds would be spread over three years’ and used to improve infrastructure, agriculture, health, and so on.
In his letter to the National Assembly, President Buhari said:
“The projects cut across all sectors with special emphasis on infrastructure, agriculture, health, education, water supply, growth and employment generation, poverty reduction… It has become necessary to resort to prudent external borrowing to bridge the financing gap”
The report from Nigeria’s Debt Management Office (DMO) as of June 2016 reads that Nigeria’s “Public Debt Stock” as at the 30th June 2016 peaked at $61.447 billion [that’s the U.S. dollar element] and the sum of ngn16.296 trillion [the naira portion of the debt]. These two sums represent the combined debts of the federal and state governments.
Nigeria’s public debt stock as at the 30th June 2016 (Image credit DMO)
Given that the official exchange rate for 1.00 U.S. dollar was NGN283.00 as of the 30th June 2016, the DMO’s report implies that the naria equivalent of Nigeria’s public debt stock was circa NGN33.7 trillion as at the 30th June 2016.
Buhari’s request to borrow $29.96 billion in the last quarter of 2016 is contrary to the position of Nigeria’s debt management office given excerpts from DMO’s “2016 Report Of The Annual National Debt Sustainability Analysis (DSA)”, which reads:
“… To this end, the maximum amount that could be borrowed (domestic and external) by the FGN in 2017 without violating the country-specific threshold will be US$22.08 billion (i.e. 5.89 percent of US$374.95 billion).”
Nigerians, PDP react and kick against borrowing $29.96 billion
Chief Martin Onovo, a consulting engineer, who was the presidential candidate of the National Conscience Party (NCP) in the 2015 General Elections, spoke to Unic Press UK.
Chief Onovo: “Debt is not free. It accumulates interest and several associated charges. Nigeria was in a ‘Debt Trap’ before the former President Olusegun Obasanjo secured a debt relief for Nigeria. This 2016, Nigeria is already back in a ‘Debt Trap’ owing over 400% of total annual national revenue and using over 37% of total annual revenue for debt servicing. Using annual budget figures, Nigeria used N712 billion for debt servicing in 2014; N943 billion in 2015 and N1.48 trillion in 2016. Nigeria has borrowed and wasted too much and can no longer afford to borrow more. The request for approval to borrow additional $29.96 is unpatriotic and deliberately destructive. We published an alarm in 2014 over Nigeria’s rising debt, and in 2015 the IMF also raised its alarm over our national debts. This government consistently takes deliberate actions to finally destroy Nigeria. This request is only one of such actions in the grand plan to destroy Nigeria. God help us.”
Felix Udoh: “The senate must not allow this borrowing plan to pass. I have no issues with a sitting government borrowing money to finance its projects, but I do have a problem with any government borrowing money without providing a plan on how such monies will be paid back and for what projects. Each dollar borrowed should be tied to specific projects under their tenure and no government should be allowed to borrow money it can not repay within it’s statutory tenure. We must put a stop to all kinds of illiterates borrowing money and leaving it for our unborn children to come and pay. This is a bad debt that will lead us to the abyss.”
PDP: The Peoples’ Democratic Party (PDP), one of the opposition parties, calls into question Buhari’s plan to borrow $29.96 billion. The party urged Nigerians to coerce the president to desist from taking steps that could escalate a parlous condition.
30. We again call on all Nigerians to speak with one voice and stop President Buhari from further destroying of our great Nation,
— Official PDP Nigeria (@OfficialPDPNig) October 26, 2016
More excerpts from the PDP’s statement:
“The attention of the Peoples Democratic Party (PDP) has been drawn to letters submitted by the Federal Government of Nigeria to the National Assembly seeking approval for an external borrowing of $29.960 billion, and movement of N180 billion appropriated for special intervention to funding of ‘critical recurrent and capital items.
“We totally disagree with the APC led Federal Government on this latest move, and call on President Muhammed Buhari to first and foremost explain to Nigerians what his administration has done with the so called ‘recovered looted funds’ and how far the 2016 Budget is fairing.
“Also, President Buhari must itemize what he intends to finance with this proposed borrowing of almost $30b instead of lumping it up in a coded term, and to plunge the Nation’s future into burden of debt. More so, this approach cannot be the preferred solution to the economic quagmire which this Government created due to ineptitude.
“This is absurd and way outside the Government budgetary provisions for Capital Expenditure and must be rejected by all well-meaning Nigerians.
“Nigerians need to know how much revenue government has been able to generate from crude oil, non-oil and independent revenue sources since assumption of office from May 2015 to September 2016. This clarification will boost confidence of Nigerians on the management of their resources especially in this period of recession before thinking of engaging in external borrowing.