The Senate on Wednesday justified the loans of $4.054bn and €710m ($$839m) planned to be obtained by President, Muhammadu Buhari.
The Chairman of the Senate Committee on Media and Public Affairs, Senator Ajibola Basiru, who stated this in an interview with newsmen in Abuja, said no country does not engage in deficit financing.
Ajibola Basiru said this as the Director-General of the Debt Management Office, Patience Oniha while giving a breakdown of the public debt stock for the second quarter of 2021.
He stated during a virtual media presentation on Wednesday that Nigeria’s total public debt stock rose from N33.11tn as of March 31, 2021, to N35.47tn as of June 30, 2021.
This shows an increase of N2.36tn or a 7.12776 per cent increase.
Recall that the President had on Tuesday submitted to the National Assembly, a request for approval to obtain fresh external loans of $4.054bn and €710m (($$839m).
The letter written to both chambers of the National Assembly stated that Buhari is also seeking the federal legislature’s approval for grant components of $125m in the 2018-2020 external rolling borrowing plan.
On May 18, 2021, the president sought the approval of the Senate to borrow $6.18bn external loans to finance this year’s N5.6tn budget deficit.
He said the loans would be used to finance critical projects and create jobs.
If the President gets the go-ahead to obtain the loans, the country’s debt profile will rise.
However, in an interview with Punch, Basiru calmed the fears of Nigerians over the borrowing plans of the President. He assured Nigerians that there was no cause for concern.
According to his explanation, the latest loan request by the President was an addendum to the earlier one approved by the federal parliament and that it was still within the framework of the external borrowing plan of the government
Basiru stated that the President accompanied the loan request with supporting documents that contained details of what the money would be used for.
He said, “What Nigerians should be looking at is the benefit and the advantage the society would have when the loans are taken and effectively utilised.
“There is no country that does not engage in deficit financing. We are still within the approved limit guaranteed by law.”
In related news, the All Progressives Congress and the opposition Peoples Democratic Party on Wednesday clashed over rising debts under the Buhari regime
The ruling All Progressives Congress (APC) defended plans by the President to borrow an additional $4bn and €710m from foreign lenders to finance projects.
The party narrated that the president’s regime was seeking additional loans to finance critical projects to stimulate the economy and create jobs in the nation’s interest.
A statement released and titled, “APC to PDP: Borrowings are to finance development projects, signed by the party’s National Secretary, Senator John Akpanudoedehe, in Abuja, on Wednesday.
The Peoples Democratic Party (PDP) had on Tuesday said the loan request was another move by the President and the ruling All Progressives Congress-led regime to further mortgage the future of Nigeria and Nigerians with less than two years left in office.
Senator John Akpanudoedehe on Wednesday said the borrowings were for the benefit of the country.
He stated, “Borrowings by the President Muhammadu Buhari-led Federal Government are for the good of the country as the money is used to develop critical infrastructure that is stimulating economic growth, generating jobs, reducing poverty and improving the general well-being of the citizenry.
“Unlike in the brazen looting days of the Peoples Democratic Party, the borrowings are designed to finance the deficit in the 2021 budget to enable the realisation of the Nigerian Economic Sustainability Plan that touches key sectors such as infrastructure development, boosting healthcare services, strengthening agriculture to deepen food security, more energy generation and continued tackling of the ravaging COVID-19 global pandemic”.
He further added that it is abundantly clear that the borrowing is hinged on genuine needs and based on the necessity to strengthen the foundation of the national economy and achieve the desired primary purpose of the government of uplifting the living standard of the citizens.
“It was in the PDP era that loans to fund power generation, purchase arms and ammunition to fight a raging insurgency were misappropriated and diverted to fund PDP activities; and the borrowed money ultimately found its way to the pockets of cronies, friends and family members of administration officials. Nigeria is still servicing a $460m loan taken from China to fund a phoney Abuja closed-circuit television contract awarded in August 2010”.
Meanwhile, responding to the APC, the National Publicity Secretary of the PDP, Kola Ologbondiyan, in an interview with The PUNCH, said, “For us in the PDP, the APC has simply confirmed what we have always known since 2014. The APC can only function in opposition. It simply lacks what it takes to provide leadership.
“This regime is the least qualified to talk about corruption. It is simply borrowing to finance the corrupt lifestyles of its party leaders and their cronies. The money borrowed since 2015 has ended up in private pockets. This explains the various financial scandals in FIRS (Federal Inland Revenue Service), NPA (Nigerian Ports Authority), NHIS (National Health Insurance Scheme), NCC (Nigerian Communications Commissions) and several government parastatals under their watch. Nigerians have started a countdown to 2023″.