$29.6bn loan: Endless borrowing will lead to endless sorrowing, Atiku warns FG
Says seeking fresh $29.6b loan is irresponsible
As the Senate on Tuesday commenced legislative process of granting request by President Muhammadu Buhari to borrow fresh $29.6 billion loan, former vice president of Nigeria, Alhaji Atiku Abubakar, has warned the Federal Government of the grave danger of continuous borrowing to the nation.
Asserting that Nigeria is being enslaved by her debt burden, Atiku said continuous borrowing by the Buhari administration will lead to continuous sorrowing by already economically traumatised Nigerians.
Recall that Atiku had barely two weeks ago warned during the Founder’s Day lecture at the American University of Nigeria, Yola, that Nigeria had taken almost as much foreign debt in the last three years, as she had taken in the thirty years before 2015 combined.
The presidential candidate of the Peoples Demicratic Party (PDP) in the 2019 general election in a statement on Tuesday described the nation’s rising debt profile as frightening.
“Frightening, not just because of the amount, but because after such unprecedented borrowing, we have emerged as the world headquarters for extreme poverty and the global capital for out-of-school children. It begs the question: what were the funds used for?”, he said.
According to him, the fact that Nigeria currently budgets more money for debt servicing (₦2.7 trillion), than it did on capital expenditure (₦2.4 trillion) is already an indicator that it has borrowed more money than it can afford to borrow while arguing that debt servicing is not debt repayment but just paying of the barest minimum allowable by the creditors.
He expressed concern that while spending 50% of current revenue on debt servicing, Buhari administration wants to take further loans of $29.6 billion.
“To say that this is irresponsible is itself an understatement”, he retorted.
Giving further analysis, he said: “Even if this administration borrows $1 trillion, it will never be enough because their challenge is one of capacity. They are not using the funds they already have wisely. They do not need more debt. They need more intellectual capacity.
“The money the Muhammadu Buhari administration wants to borrow to fund its Medium Term Expenditure Framework (MTEF) could be acquired without sinking the nation into further debt. All it requires is visionary leadership and business acumen.
“In my economic blueprint, I said that rather than turn in regular losses (which it has consistently been doing), the best thing to do with the Nigerian National Petroleum Corporation is to reform it. Of course, the administration’s paid propagandists went into overdrive, accusing me of planning to sell the NNPC to my friends.
“But just last week, Saudi Arabia’s ARAMCO, the most profitable company in the world, took that route and almost broke the global stock market with the most successful initial IPOs in world history, bar none. Ironically, Saudi Aramco raised $29.4 billion via this IPO. Just the amount this administration wants to borrow.
“That could have been Nigeria’s story, but for our failure of leadership. By reforming the NNPC, Nigeria can raise the $29.6 billion the Buhari regime wants to borrow, and we will raise the money without going into debt.
“If we had taken that route, not only would we have attracted Foreign Direct Investment into Nigeria, but even better than investment, we would have attracted confidence in our economy, because it would have shown that we have a thinking leadership”.
He lamented that there is scanty information in the Medium Term Expenditure Framework for what the loan would be used for, while also knocking the government for how it expended the recovered $322 million Abacha loot.
“And in proof of this, I offer the example of how this administration took delivery of $322 million Abacha loot in 2018 and claimed it shared it out to poor Nigerians, only to obtain a $328 million loan from China, allegedly for ICT development the very next month. How do you share out $322 million and then borrow $328 million? Who does that? At the risk of repeating myself, it is clear that no amount of money, whether from revenue or borrowings, will be enough for an administration that lacks capacity”, he said.
Suggesting the forward from the current economic quagmire, Atiku said “rather than profligate borrowing, what Nigeria needs to do is restore investor confidence in our economy. Key to that is respecting the independence of key institutions, such as the Judiciary and the Central Bank of Nigeria. Both of these institutions are now the captives of Buhari and his cabal, and though they are loathe to admit it, they cannot take one step without watching their backs.
“Why are foreign investors leaving Nigeria for Ghana? The answer is that Ghana, unlike Nigeria, has learnt how to divorce key institutions from politics. The Ghanaian central bank enjoys a degree of independence that our own CBN can only dream of under the prevailing atmosphere.
“You will not hear Ghana’s leaders give flippant interviews overseas about their plans for the cedi, as Buhari has done in Europe about the Naira. It rang alarm bells because it is not the job of the executive to interfere in the role of the reserve bank.
“Neither will you find Ghana’s leaders blatantly intimidating the judiciary by obviously setting up judges and invading courtrooms. Why would any investor come to Nigeria under such prevailing circumstances? Their thought would be that if they had industrial disputes, our courts, under this administration, could not be counted on to deliver impartial justice.
“I was part of a team that paid off Nigeria’s entire foreign debt. I, therefore, cannot sit and watch an administration without vision squander our children’s future by taking and wasting loans that they do not even have the capacity to utilise properly.
“Thank God for leaked memos that have exposed the lies this regime has told Nigerians about unprecedented revenues in the Federal Inland Revenue Service and the Nigerian National Petroleum Corporation. Now, we know that Nigeria is not poor because she is not making enough money. The truth is that Nigeria is poor because she is not making the right leadership decisions.
“Our youth must have something better to inherit from us than unsustainable debt fuelled by insatiable greed. That is why I call on the Senate of the National Assembly to show loyalty to Nigeria and reconsider its decision with regards to approving Buhari’s $29.6 billion loan request.