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President Bola Tinubu
Analysts have expressed worry over Nigeria’s mounting debt stock amid fresh loan requests by the Bola Tinubu administration.
They argue that the major consequence of an expansive debt profile is arrested development arising from debt obligations.
The Federal Government recently announced that it was going for a fresh $1.5 billion loan from the World Bank and another $800 million loan from the African Development Bank.
Records from the Debt Management Office (DMO) put Nigeria's external debt at $42.7 billion in March, 2023, compared with $41.7 billion in the previous quarter. The total provided excludes domestic loans.
Prof John Ebhomien, an All Progressives Congress (APC) chieftain and public affairs analyst, however, said that Nigerians should not worry over the latest loans as it is not a bad idea if they put them to good use.
Prof Ebhomien, former Consultant to the United Nations Office of Project Services as well as former World Bank/ International Monetary Fund (IMF) economist and financial management expert, said: “The request for approval of $1.5 billion from the World Bank and $800 million from the AfDB by President Bola Ahmed Tinubu from the National Assembly is not a bad idea, if the money can be put into effective use.
“My worry is that there is too much leakage in the disbursement of funds in the Ministries, Departments and Agencies (MDAs).
“Mr. President and his advisers should endeavor to carry out economic evaluation and sensitivity analysis on the impact of this loan they want to borrow from the World Bank and African Development Bank.
“We cannot be free as the country is now being mocked by other countries of the world. We cannot continue to borrow money without making adequate preparation for repayment.
“We have seen in the past where governments at all levels borrow money meant for projects, but such monies were diverted to other purposes which would not be of benefit to Nigerians.
“The huge debt profiles of our country calls for serious concern by all discerning minds. We need to ask ourselves what we used those money borrowed for that results into the huge debt profile.
“The governments, both at the Federal and State levels, must put in place appropriate mechanisms for probity and accountability in all ramifications.
“We cannot continue to borrow without tangible results. It does not speak well of us as a country. We need to ask ourselves when and how we found ourselves in such a sorry situation.
“President Tinubu and his advisers must develop strategic plans for sound decisions and actions to be taken in the management of our funds at all levels. The Minister of Finance and the Governor of the Central Bank must block all financial leakages in the system.
“The hydra-headed problems of inflation which is over 28 percent, interest rate on borrowed money which is over 24 percent and the foreign exchange rate which is over N1000 to a Dollar in the black market does not help matters.
“Mr. President must move fast to fix the economy and ensure that the $1.5 billion and the $800 million sought from the World Bank and African Development Bank are used judiciously for development projects.”
Abdullahi Oluwakemi Akinsanya, a retired banker, also said there was nothing fundamentally wrong with the country taking more loans, depending on the use of the borrowed funds.
Akinsanya, who has a special interest in development economics, stated: “What I mean actually is that in the midst of all these problems confronting us as a nation where there is no reliable energy, the increasing cost of petrol, increasing cost of food items, etc, if the loan is being collected to address things like these, especially energy, that would be fine.
“But, if it will be collected to be spent on sheer frivolities, that would be arrant nonsense. That is the line of my argument.
“Or, the money would be collected to fund one useless palliative which doesn’t make any sense.
“Consider what they are talking about now that they are going to give some 12 million Nigerians some monthly stipends for a period of six months which has been calculated to be over N1 trillion.
“What is that? What is the sense in that? If that is not mere wasteful consumption what do you call it?”
Dr. Felix Nwosu, a cleric and public affairs commentator, said, in his view, it is unacceptable and crazy the way the leadership is managing the affairs of the country.
“Yahoo-Yahoo and banditry and terrorism are not the way out of this problem confronting nationhood. Looking at the debt profile of Nigeria, the future looks bleak. But, the most annoying part of it, it is man-made.
“Nigeria has been the second most prayerful nation in the world, yet among the poorest countries. Who bedeviled us as a nation? Looking at the question, the person who bedeviled Nigeria is not far. It is the leadership,”
Dr Nwosu continued: “Nigerians lack proper training in various areas. It is really sad that we have refused to learn from our past mistakes. We refused to learn from the past experiences. It is really sad and painful.
“If one looks at Nigeria’s debt profile it shows that our leadership only knows how to consume, but lacks knowledge of how to produce.
“At the end of the last administration, they went for loans that increased our debt profile and the National Assembly approved them without batting an eyelid.
“That’s why Nigerians see the nation’s lawmakers as rubber stamp legislators. It is really sad. What really happened to Nigeria foreign reserves saved in order to tackle internal economic issues and recovery efforts?
“In fact, Nigeria and Nigerians should begin to ask these guys called our leaders some crucial questions.
Ambassador Dr. Kalu Ofon Emmanuel, the Lagos State Chapter President, International Human Rights Protection Service, Florida, USA, maintained that President Tinubu going for more foreign loans when the country is already neck-deep in debt “is absolutely disheartening. Only God knows the specific decades it will take for Nigeria to be out of indebtedness.
“This development is not acceptable. It is a big shame that we have found ourselves in this mess. It is unfathomable that no attempt has been made to start offsetting the incurred debts, rather the Federal Government is still making attempts to borrow more.
“It sounds good to borrow but to pay back is another big problem. What is the guarantee that if the loans are granted, the modality and possibility to servicing them is there. Is it feasible?”
Dr Andrews Okhirebhu, a cleric and commentator on national affairs said: “It is indeed laughable, a mockery, a charade by the supposedly caretakers of our collective wealth and economy.
“Though, no one expect anything different between this government and that of President Muhammadu Buhari, the government is becoming very unbecoming with its cunning policies to defraud itself and the people they profess to seek their welfare.
“Has the government told us how the billions of naira were distributed for the so-called palliatives? One bag of rice for a whole community of thousands of dwellers!
“Again, I have just read that the government has concluded plans to transfer money to about 150 million households.
“Who is deceiving who? Perhaps, the reasons for the request of the double loans, after about 360 Total Prado 2023 series, at N200 million each, have been shared among the senators.” (Sunday Independent)
