The Centre for Anti-Corruption and Open Leadership (CACOL) has cautioned the federal government on the huge debt burden imposed on the country, saying that the government should not sell Nigeria’s future with borrowing.
CACOL in a statement buy the Director of Administration and Programmes, Tola Oresanwo, on behalf of the Chairman, Debo Adeniran, remarked: “It was reported by some sections of the media recently that the Federal Government was engaging the World Bank on a fresh $1.5 billion loan.
“To authenticate the report, the Minister of Finance and coordinating Minister of the Economy, Wale Edun, on Monday after the second Federal Executive Council (FEC) meeting presided over by President Bola Tinubu at the Presidential Villa, Abuja, disclosed to newsmen that the federal government has approved an application for $1.5 billion in financing from the World Bank, even as the government approved another $80 million financing from the African Development Bank (AfDB).
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“According to the minister, the funding will be provided through the International Development Association, known for its virtually interest-free loans.”
CACOL further narrated that on the $80 million financing from the African Development Bank, the minister said the financing was designated for the Ekiti Knowledge Zone Project (EKZ) in Ekiti State. He said EKZ aims to empower young individuals by facilitating their engagement in the knowledge economy and the technology sector. Edun said the project will enable training, employment opportunities, and participation in the ever-growing technological landscape in Nigeria.
The report, according to CACOL, further stated that so far, Nigeria had secured a total of $1.95 billion in loans from the World Bank in the first four months of President Bola Tinubu’s administration. The first was the $750 million approved on June 9, 2023, to boost Nigeria’s power sector. The second was $500 million to help the country’s drive for women’s empowerment and was approved on June 22, 2023. The third was a $700 million loan to enhance adolescent girls’ learning and empowerment, which was approved on September 21, 2023.
Chairman of CACOL, accordingly, declared: enthused that “The decision of the federal government to continue borrowing amidst the rising debt burden already imposed on the country by the past administrations and the seemingly unsustainable nature of the loans has made us to break the silence of the day on this serious issue.
“We want to emphatically say that we expect this administration to dare to be different from past administrations; we expect the president and his cabinet members to think out of the box in finding solutions to the myriads of problems confronting the nation.
“If a country that can afford Sports Utility Vehicles (SUVs), allegedly worth N130 million to its lawmakers but still go cap in hand begging Bretton Woods organisations for funds needed to finance its budget, then something is wrong somewhere. If the government must borrow at all, it should not be for servicing recurrent expenditures, but must be targeted on capital projects that would later generate income or grow our gross domestic product (GDP) sporadically.
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“We hope the President and his advisers know the implications of these incessant borrowings on our economy, the value of the naira, the enormity of the debt service burden, the current size of our debt, and our very limited capacity to service both domestic and external debts. Those given us loans also have their stringent conditions attached to it which must be met by the government and most often, some of these conditions are not made public, hence imposing the burden on even unborn generations.
“We would like to call on the President and his cabinet members to try as much as possible to cut down on our excessive borrowings as a country, they must also strive to reduce the cost of governance and the amount of forex that we send out to other nations through the imports of petroleum products, brand new cars or SUVs, etc. The challenges being faced in the oil and gas sector which had impacted negatively on the country’s earnings should be permanently tackled so that government revenue from that sector can be fully maximized. Other sources of revenue should also be explored like the blue economy, bringing more rich people into the tax net, exploration and exportation of more mineral resources which nature has richly blessed us with, empowering more people to practice mechanized farming which has the potential of not only ensuring food security within the country but also earning foreign currencies through exportation, etc. The administration should be reminded that relying solely on borrowing to finance our budget especially recurrent expenditures is a recipe for impending disaster. ”