Taking Nigeria’s Economy Back To Buhari’s Era Of Borrowing To Fund Budgets; Hardship Of Nigerians Worsens

By Suleiman Umaru And Lateef ADegbite

When Wale Edun, minister of Finance and Coordinating minister of the Economy who had earlier gladdened Nigerians’ heart that President Bola Ahmed Tinu’s Administration would not rely on external borrowing to fund the country’s yearly budget suddenly turned round to say that ‘’it is a good thing to borrow,   to fund the 2024, budget of,N28.7 trillion, many knew that the  economy would further be over burdened by debt.

Godswill Akpabio, a former governor of Akwa Ibom state led Senate approval of Tinubu’s request of $7.8 billion and 100 million Euro to complete the country’s 2022-2024 borrowing plan to fund the 2024 budget speaks volume. Former President Olusegun Obasanjo may have dropped a bombshell when he said African countries including Nigeria may find it difficult ‘’to secure debt relief considering their large debt profiles’’.

Former President Olusegun Obasanjo secured debt relief for Nigeria in 2003

Going reports from the Dept. Management Office, DMO, Nigeria’s total public debt rose to N87.91 trillion as at September 2023. Based on the report, the total external debt stood at N31. 98 trillion while the domestic debt was N55.93 trillion.

The former Nigerian President had alluded to the fact that the debt relief secure by Nigeria under his Administration from the Paris Club in 2003 which worth $1.8 billion and an overall reduction of the country’s debt stock by $30 billion which was completed in 2006, when Nigeria made its final payment, and its  books  were cleared  of any Paris Club debt  was allegedly mismanaged by successive Administrations and which has plunged the country   into the current huge and undeserved debt. He had said that future Administrations in Nigeria will have no option but to repay these debts. He is right.

Nuhu Ribadu, a retired Assistant Inspector General of Police, AIG, and former Executive Chairman, Economic and Financial Crimes Commission, EFCC, and now President Tinubu, National Security Adviser, NSA, may have confirmed Obsanjo’s when he said recently that much of the money that had been generated by the Administration over the last seven months had been used to service the country’s external debts. 

Even when the $7.8 billion foreign loan and 100 million from the Paris Club which is expected to be used to fund the 2024 budget, the Nigerian President  has already  budgeted N5 billion  for Presidential yatch , considered as reckless spending by Financial analysts.

 Describing both Local and external   debt as a trap that no country should fall into, the Ogun state former Nigerian President who could not hide his feelings had said that’’ Leadership was the umber problem facing Nigeria and other African countries’’. 

It was not surprising why Nigerians are not happy with the Lagos state born Nigerian President over the hasty removal of fuel subsidy and unification of the Autonomous and Parallel, popular, Black market foreign exchange rates on May 29, 2023 and planned borrowing of $7.8 billion and 100 million from the Paris Club, London Club and other Multilateral Financial institutions including the World Bank and International Monetary Fund, IMF.  

Instead of the incumbent Nigeria’s President   economic policies helping to grow the economy, political analysts said ‘’ it has turned out to be a financial burden to individuals, families and businesses across the country’’. Former President Obasanjo had that the increasing Nigerian debt profile could have been avoided’’ if successive Nigerian Leaders, had set good examples, be bold and courageous when making decisions,  accept mistakes  and learn  from as well as have  realistic dream’’.

The harsh economic situation is in Nigeria appears to have become  so worrisome going by the report of the National Bureau of Statistics, NBS, under the close watch of Prince Adeyemi Adeniran, that the country’s inflation rate ha hit  over 28%  and unemployment rate reach unacceptable level over the last seven months of the present Tinubu’s Administration.

The government may not have taken any bold initiative to address the complaints of Nigerians and businesses. From the boardrooms of Broad street in Lagos, the nation’s Commercial nerve centre to the main –streets  of the ancient o town of Kano and the Nembe Creeks of Nembe in Bayelsa, home state of former President Goodluck Jonathan,  the story is the same.

 The  Independent Petroleum Products Marketers in the guise of  Natural Oil and Gas  Suppliers Association of Nigeria,  NOGASA,  appears to have sent a message to Tinubu and Edun, the minister of Finance  that if  the foreign exchange  for importing Premium Motor Spirit, PMS,poular, petrol  into the country  is not pegged  at N600.00 to the North American country of the United States , US, one dollar,   in the next three months to cushion the harsh effects of the high exchange rates on their businesses , they may be forced to increase the pump price of  petrol  to N1, 200 from the current N614.00 per litre depending on the filling station.

The NOGASA leadership anger was the continued fluctuation of the exchange of the local currency to the US dollar in the AFEM and Parallel markets. Take for instance on Tuesday, January 2, 2024, the naira was said to have exchange at N91.435 rate to the US dollar at the AFEM and over N1,200.00  at the parallel market.

  As a prelude to carrying out their threat,  the Leadership of NOGASA, has threatened   mass shutdown  of filling stations  and packing of their petroleum tankers  across the country to register their complaints  of unattainable high cost  of importation , lifting, transportation and distribution  of products .

Babatunde Fashola, a former governor of Lagos and immediate past minister of Works and Housing  under the Buhari’s Administration had said that the marketers would have a breather  to import petrol , sell and make profit  if there are some cost reductions such as shipping, insurance,  port charges and ensuring that the countries’ refineries, particular, the Port Harcourt reefing and Petrochemical plant and the $19 billion Dangote refinery which has a capacity to process 650,000 b/d to produce petrol ,  Automotive Gas Oil, popular, diesel, Dual Purpose Kerosene, DPK and Aviation Jet fuel, that has been completed to start production .


Although Mele Kolo Kyari, Managing Director, Nigerian National Petroleum Company Limited, NNPCL, and his Managemen team have not given approval to the request of the marketers to sell a litre of petrol at N1,200.00 but they have repeatedly  said that  the Port Harcourt refinery, Dangote  Refining and Petrochemical plant and other  refineries coming on stream in Nigeria soon  is not going ‘’to change  the current price of N614.00 per litre of petrol.

 He was emphaic that that’’ no matter the volume of petrol being expected from PortHarcourt and Dangote refineries to be pushed into the Nigerian market , the cost of  the product  would not reduce , regardless  of the fact  that  it was produced locally.

The NNPCL, helmsman was said to have sent a  message to Nigerians  not to ever think that because petrol would be produced locally this time around the price range of N614.00 per litre would remain  because the refineries would  also input  the cost of production  and other things.    He has made clear to transporters  that a t litre of petrol  will be sold  at the current price  because  ‘’thre is no cash to-back  subsidy , noting that the country  no longer  has the resources  to continue payment of subsidy to markers.

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