Business & Economy
FG Says Externals Loans Not For Recurrent Expenditure, Explains Why It Is Borrowing
The Federal Government has restated that the various loans including the foreign debt that it is taking are not for funding recurrent expenditures or pay salaries but for implementing capital projects which the previous administrations failed to execute.
The clarification from the government is coming against the backdrop of criticisms it has been receiving over its frequent request for fresh loans amid sharp increase in the country’s debt profile over the past few years.
This disclosure was made by the Minister of Information and Culture, Lai Mohammed, in Maiduguri, Borno State, during a one-day town hall meeting on the power situation in the state.
While defending the frequent request for loans borrowings, Mohammed said that the Federal Government has implemented a lot of projects in different parts of the country which he claimed the previous administrations had used as a conduit pipe to squander public funds.
He said the critics were members of previous administrations who performed badly in terms of modernising the country’s infrastructure, even when they served at a time when earnings were multiples of what is obtainable today.
What the Minister of Information and Culture is saying
Mohammed pointed out that infrastructure is the engine of economic growth, hence, the premium it places on building and reconstruction.
He said, “Naysayers have recently ramped up their criticism of the Buhari administration from borrowing. These critics are very insincere; we do not borrow for recurrent expenditure neither do we borrow to pay salaries. We are borrowing to build world-class infrastructures that will benefit generations of Nigerians and we have a lot to show from the loans we have taken.’’
The Minister noted that the Federal Government has over 13,000 kilometres of federal roads under repair, rehabilitation and reconstruction.
He said, “There’s a road project in every state today. Today we have started the countdown to when the second Niger bridge which successive administrations have built only on paper will be completed.”
“It is an irony that those who are criticizing us today performed very badly in terms of modernizing our infrastructure even when they served at a time when our earnings were multiples of what we get today. Have they embarked on the kind of infrastructure development we are currently engaged in perhaps there would have been no reason for us to borrow as much as we are doing today.
“For example, in their time they claimed to have spent billions of naira in building infrastructure but as one can see their infrastructure projects are only on the pages of newspapers. Today we are still saddled with looking for resources to build the same infrastructure for which they claimed to have allocated huge resources. We’ll however not be deterred by their antics, we’ll continue to ignore those who have decided to play politics with everything,” Mohammed added.
What you should know
Recall that President Buhari recently sent a request for another external loan to the Senate on September 14 despite criticisms from some experts and the main opposition political party, the Peoples Democratic Party (PDP).
In his letter transmitted to the Senate, he sought the approval of the lawmakers to borrow $4 billion and €710 million loans from bilateral and multilateral organisations to fund the deficit in the 2021 budget.
The National Assembly had earlier in July approved the President’s request to borrow $8.3 billion and €490 million loans contained in the initial 2018-2020 borrowing plan.
