Debt Burden: Nigeria Equals Argentina

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By Stephen Ubanna

When Godwin Obaseki, an Invest Banker and People’s democratic governor of the south-south state of Edo raised alarm that the President Muhammadu Buhari, a retired army General, of the ruling All Progressive Congress, APC,  will throw the country into a  deepening debt profile of between  N15 trn and N32trn  by the end of 2023, he came under severe  attack  from different government quarters.

Hajia Zainab Ahmed, the minister of Finance, Budget and National Planning and  Godwin  Emefiele, the governor of the Nigerian  Central Bank were said to have taken up, accusing him of misleading Nigerians. He had said that the during the first term of the Buhari Administration, the Transition Committee which he had set up  to facilitate the take off the new Administration  had accused the then President Goodluck  Jonathan Administration  in 2015, of leaving  the country  with an unpaid  of debt of N50billion.  The APC , Chieftains had Lambasted the PDP government of having mismanaged the  Nigerian economy.

The Edo state governor may have gotten a premonition that the the Katsina state born Nigerian President is working  on the National Assembly to give approval  for the government both at the Federal and state levels, to secure  loans to provide needed critical infrastructure in the country. He may have had his way as the Lawan Ahmad led Senate has given the nod to both the Federal and state governments to borrow $1.5 billion and $995million external loans each.

Ahmad : Mobilise Other Senators To Approve Foreign Loans For Both Federal and State Gov’ts

In justifying the approval for the  foreign loan for the 36 states of the Federation,  the Senate  Committee  on Local and Foreign debt Headed by  Cliford Ordia, in its report had said  that the $995 million  recommended for the states which had been approved by the Lawmakers  is meant for Agricultural  Mchanisation  across the 774  Local Government Areas across the country. The Committee had said the $1.5 billion foreign loan recommended for the  Federal government which was also approved for the Lawmakers  will be used to fund  critical infrastructure in the aftermath of the Asian country of China emerged coronavirus, popular, COVID 19.

In requesting the Senate approval to seek for the foreign Loans, the Nigerian President  may have told the Lawmakers  that  it will be facilitated   by the World Bank, International Monetary Fund, IMF,  African Development Bank Group, AfDB and the Brazil Export and import Bank.

The reasons that was said to have been provided by the government for asking for the the loans both at the Federal and state levels may have sounded very convincing that the Ordia led Committee has no option but to recommend to the House that the request should be approved.  Hajia Ahmed may have told the Committee members at their initial meeting to give more insight about the country’s Foreign and Local debts   and the additional Loans being requested that it is still within the country’s sustainable limit.

Aware that that he Senate  given  the nod to the Federal government  to go ahead and borrow the $1.5 billion external loan  may have informed why the government  has concluded  plans to embark  on the multi-million dollar project  to equip with  facilities including drugs   200 Primary   Healthcare Centres and the all the 104 Unity Schools across the country .

Sale Mamman, minister of Power, who may have opened up on the Federal government planned projects,  was said to have also  disclosed in his recent tweets that the government also plans  to invest on the mini-grid project . The mini-grid project, which is to be undertaken by the ministry of Power,  he had said, is designed  ‘’to provided  solar-powered  streetlights to the host Communities of the healthcare Centres  and within the environment of the schools’’.

The Power minister  disclosed that  the  decision to invest on the People-oriented projects  was taken at the Federal Executive Concil, FEC,  basically to revolutionalise  and ease  the learning process in the Unity Schools and to facilitate   an uninterrupted  health –care services to the rural Communities across the country. 

The recent attacks in schools in Kaduna, Zamfara , Niger, and Katsina, the  retired army General’s home state, where hundreds of student were kidnapped by the Bandits, with threat of killing them in , if their demands were not met may have encouraged the Buhari led APC, government to consider   the street lightening project in order to enhance  the security  arrangements around the schools.

He had said that the intention of the Buhari Administration is to achieve 30%   renewable energy  sources by 2030. The worry of many is that Buhari  is running the country on borrowed loans which calls to question  what the revenue being generated by the Nigerian National Petroleum Corporation , NNPC, in the sales of the  country’s Crude in the International Oil market, Federal Inland Revenue Service, FIRS, and the Nigerian Customs service, NCS,  are being used for  all these years.  Take for instance, this 2021, the Senate has   approved a N1.6 trn revenue target for the Hameed Ali, a retired army  colonel led, NCS.

The minister of Finance, Budget  and National Planning , had made  Nigerians to believe that  that it is  the revenue generated by these  agencies that are shared at the monthly meetings of the Federal Accounts  and Allocation Committee between the three tiers of government, Federal, state and the 774 Local government  Areas across the country. This is an indications that without the foreign loans being taken taken by this Administration over the last six years, it could not have been able to execute any meaningful project in the country.

Many believe that the Federal government will at the end service the  states  foreign debt because of the weak sources of internally generated Revenue, IGP, particular the north east states of Borno, Gombe, Adamawa and Yobe.  Last year, Yobe state , was said to have only generated  little over N1 billion as its IGR, an indication that the state is solely dependent  on the allocations from FAAC to run the affairs of the state.

Obaseki: Gov.Of Edo State

The worry of many  and also expressed by Obaseki, the Edo state governor, was that  that  at the rate which  the Buhari government is dragging the country into borrowing from Multi-lateral Financial Instituations it may  turn out to be a big blow on the naira, the  nation’s currency which might be forced to exchange for between 1000.00 or N2,000.00 for thee North American country of the United States dollar as currently obtained in the south American country of Argentina, Peso which is worthless in Foreign Exchange market but still stronger than the naira.  At present N4.09 exchanges for one Argentina Peso at the Forex market.

 This is where the government may have to rally Nigerians to stem the Fiscal slide as advised by the Edo state governor, who is an investment Banker, to save the situation from getting worse.  

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