Nigeria’s debt profile is on an upward trajectory following Thursday’s approval by the Senate of President Bola Tinubu’s loan request of $2.2 billion to partially finance the ₦9.7 trillion budget deficit for the 2024 fiscal year.
The House of Representatives is bound to follow suit in its approval, even as former Vice President Atiku Abubakar lamented the loan he described as bone-crushing to Nigerians and bringing insufferable pressure on the economy.
The Senate approval came after the presentation of a report by the Chairman, Senate Committee on Local and Foreign Debts, Aliyu Wamakko, during plenary.
President Tinubu wrote to the two houses of the National Assembly that the loan was integral to his administration’s fiscal strategy for the coming year.
Wammako said the requested loan is planned for execution of ongoing projects and programmed in the 2024 Appropriation Act which are critical for growth and development.
“It will contribute to the implementation of the Debt Management Strategy which seeks to reduce the cost of borrowing, lengthen the maturity of the public debt stock, free up space in the domestic market for other borrowers and help increase Nigeria’s external reserves,” he explained.
But for Atiku, the presidential candidate of the Peoples Democratic Party (PDP) in last year’s election, the request for another round of loans is a bone-crusher.
His words, in a statement: “The recent report released by the World Bank, showing Nigeria as the third most indebted country to the International Development Association (IDA), is very concerning.
“This report is coming just when the government has already sent a proposal to the National Assembly signalling an intention to borrow an additional N1.7tn being shortfall in the 2024 budget through Euro Bonds.
“What makes this particular loan proposal even more concerning is that it is benchmarked at the exchange rate of 1 USD to N800, whereas the current exchange rate from the Central Bank of Nigeria stands at over N1,600 to 1 USD.
“Nigeria is sinking further in debt, and the National Assembly has become an accomplice once more. Tinubu had, in July this year, boasted that the FIRS and Customs under his watch have collected all-time high revenues to finance the Budget. Why then are they still borrowing? There is something that they are not telling Nigerians, even as they are being crushed by a combination of their failed trial-and-error policies and loan rackets.
“These Tinubu’s loans are bone-crushing to Nigerians and bringing insufferable pressure on the economy, especially when they are not properly negotiated and utilized.
“It is concerning that the voracious appetite for these humongous loans is powered by corruption and not for infrastructure and development needs. A report by Budgit, a budget watchdog, has disclosed that the 2024 Budget is a mess because of the level of pork associated with it.
“I feel a sense of personal agony seeing that just a few years after the administration of President Obasanjo took our country out of foreign indebtedness, we are today back at the top spot in the same conundrum
“It is time that we apply more caution and apply arithmetic to the loan frenzy.”
