Financial experts have said the plan by President Muhammadu Buhari to borrow $29.96 billion will spell doom for Nigeria.
Economic and financial experts have raised alarm over President Muhammadu Buhari’s plan to borrow $29.96bn from external sources as they say it plunge Nigeria into further debt.
The opposition party, Peoples Democratic Party in particular asked Buhari to tell Nigerians what it had done the recovered looted funds between May 2015 and May 2016 amounting to N78.3bn, $185.1m, £3.5m and €11,250m in cash. The party urged Nigerians to stop Buhari from borrowing the amount and moving N180bn appropriated for special intervention to fund critical recurrent and capital items.
It also asked the two chambers of the National Assembly to reject the request by the President.
Buhari had on Tuesday asked the National Assembly to approve the external borrowing plan to enable his government to raise funds to execute key infrastructural projects across the country between now and 2018.
The call for rejection was contained in a press statement signed by Prince Dayo Adeyeye, National Publicity Secretary of the PDP. The statement reads:
“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 $29.960b, and movement of N180b 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 Government budgeted the Sum of N6.07trn for the 2016 Fiscal Year with deficit of N2.22trn and according to the breakdown, N1.8trn was budgeted for Capital Expenditure and President Buhari is now seeking to borrow over N9trn ($29.960b) for ‘critical infrastructure’. This is absurd and way outside the Government budgetary provisions for Capital Expenditure and must be rejected by all well-meaning Nigerians.
“Nigerians will recall that the Minister of Information, Culture and Tourism, Alhaji Lai Mohammed in June 2016 made public through a press statement, an account of recovered looted funds between May 2015 to May 2016 amounting to the sums of N78.3b, $185.1m, £3.5m and €11,250m in cash; while others were under interim forfeiture. What happened to the recovered funds?Or is it the same funds the EFCC and DSS are planting in houses of opposition figures and Justices instead of channeling it into the economy? In addition, the Chairman of Economic and Financial Crime Commission (EFCC), Ibrahim Magu recently confirmed our position when he stated that the Commission recovered more money in 8 months than it recovered in 12 years.
“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.
“It is no gain saying that the APC led Federal Government has left no stone unturned in castigating the PDP’s 16 years as wasted even with its obvious achievements; one of which was getting reprieve from the Paris Club of Creditors.The APC led Federal Government is again taking Nigeria prior to Year 2005 when external debt burden derailed the growth of Nigeria economy and weakened the GDP before the total cancellation of her debt. This proposed action of the APC’s Government will be a great injustice to the citizens of this Country now and in the future if they are plunged back into debt.
“Let us state unequivocally, that history will not forgive this APC Government and its collaborators if they allow this injustice and maladministration to our economy and citizens to stand.We therefore call on the two Chambers of the National Assembly to reject this anti-people request by an anti-people government that has no genuine interest for the growth and development of the people of this Country.
“We again call on all Nigerians to speak with one voice and stop President Buhari from further destroying of our great Nation, Nigeria and by extension, Africa.”
Also, experts on Wednesday said the amount was too huge and that the Buhari-led administration needed to tell Nigerians the specific infrastructural projects in exact locations across the country that the money would be used to finance.
A professor of Economics at the Olabisi Onabanjo University, Ago Iwoye, Sheriffdeen Tella, described the external borrowing plan of the Federal Government as too bogus.
He said, “The money is too huge. We need to know the breakdown of the projects it will be used for. If it is for project financing whereby it is tied to specific projects in certain parts of the country, then fine. We need to also specify how much will be borrowed each year over the next three years of the borrowing plan.
“To me, the money is too huge. We do not manage our debts properly. We need to specify the repayment plan and what is going to be our income over the next five years or more. We are not good managers of resources; we are going to run into serious problems with this. If all these details cannot be given, then the National Assembly should approve just $10bn from it. Already, we know that we can’t borrow to finance recurrent expenditure.”
Another economic analyst at Ernst & Young, Mr. Bisi Sanda added: “Borrowing, in principle, is not wrong. But if you are using it to finance the corruption or ostentatious lifestyle of public officials, then there is a problem. It has been said some time ago that Nigerians only get 45 per cent value from all government expenditure. This is unlike in the USA where the people get 100 per cent value.
“Our public financial management must be transformed first. Seventy per cent of the budget in Nigeria goes on recurrent expenditure. What about the budget padding allegation and the huge bill of the legislature? We need to address the public financial management system, otherwise, we will find ourselves in the debt trap and leave huge debts for coming generations.”
President Muhammadu Buhari has been urged to itemize details of what he wants to use the money for and give account of what it had done with the money the government had boasted it recovered from looted funds.
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