There Is So Much Money, We Won’t Borrow To Pay Salaries – Kwankwaso

 

The presidential candidate of the New Nigerian Peoples Party (NNPP), Rabiu Kwankwaso, says Nigeria has enough money to take care of every of its citizens.

He said this while answering questions on indiscriminate borrowing which has set back the country’s economy in recent years during The People’s Townhall 2023, a live programme organised by Channels Television in Abuja on Sunday evening.

The former Kano State governor who said he repaid all debts he met as governor in Kano without borrowing, boasted of replicating same at the federal level.

He said, “There is so much money in this country, anybody who says there is no money either he doesn’t know or he wants to be mischievous. There is enough money to take care of each one of us in this country; we have done it in Kano in 1999 to 2003, we met a lot of debts, we paid the debts after eight years. When I went back I met debts of hundreds of millions of US dollars, and we settled them before I left in 2015.

“I’m talking of borrowing money either from banks or individuals, we have never borrowed. So I believe that that can be replicated to a very large extent at national level. I will not say I will not borrow but if they are important things pay themselves, not to borrow to pay salaries, handle current expenditure and so on, I believe there is even more than enough money in this country to handle that.”

Kwankwaso also said that if elected president he would negotiate with Nigeria’s creditors to reschedule payment of debts so that government can have money to take care of other things.

“The situation as we are being told now is that whatever we are getting as our resources, as our money in this country is not even enough to service our debt, I think that is what we have heard. Now the issue is that any responsible government day one will sit down with all the people, creditors and see how they can be rescheduled, there has to be negotiation.

“You cannot be collecting all your resources and paying interest to the creditors, there has to be arrangement to make sure that you are given a breathing space so that you can start bringing in the good things that are necessary for the country to move forward,” he added.

Borrowing For Consumption Contributes To Nigeria’s Economic Challenges – Peter Obi

Why People Say I Am Stingy – Peter Obi
File photo of Peter Obi

 

A former vice-presidential candidate of the Peoples’ Democratic Party (PDP), Peter Obi says borrowing for consumption is one of the major contributors to Nigeria’s economic challenges.

Mr Obi, in a series of tweets on Thursday, said Nigeria is spending 90% percent of its revenue in servicing debts because the funds borrowed are mismanaged.

“Our past and continued mismanagement of borrowed funds and borrowing for consumption are the major contributors to the monumental economic challenges confronting Nigeria today.

“Today, we are spending 90% of our revenue servicing debts because, ironically, our borrowed funds were mismanaged and have not been properly invested.

“If the funds borrowed were invested in critical areas of development, education, health and poverty alleviation, Nigeria would have developed far beyond what it is today,” he said.

Obi, who is also a former governor of Anambra State, has repeatedly criticised the Federal Government for borrowing.

He added in his post on Thursday, “There is nothing wrong with borrowing. But what we need to do is to put a law in place that if we must borrow, it must strictly be for investment in areas of growth.

“Many countries have built robust economies with borrowed funds. We can do the same if only we enthrone visionary and committed leadership.”

 

Obi, in September last year during an interview on Channels Television, said Nigerian citizens are getting poorer because the government is borrowing for the wrong reasons.

READ ALSO: ‘I Will Run For President If PDP Zones Ticket To South,’ Says Peter Obi

He said the nation’s Gross Domestic Product (GDP) cannot be growing while the people are getting poorer.

He believes the growth Nigeria needs is one that “pulls people out of poverty by making the people have disposable income and be able to feed themselves.”

In November 2021, Patience Oniha, the Debt Management Office (DMO) director-general, said public debt was instrumental in helping Nigeria bounce back from the recession.

She said the government understands the need for caution when borrowing, especially with mounting public debt and rapidly increasing debt service obligations.

Nigeria Won’t Have Exited Recession Without Borrowing, Says Finance Minister

 

The Minister of Finance, Budget and National Planning, Zainab Ahmed has again defended recent borrowings by the Federal Government, insisting they were instrumental to the country’s exit from recessions.

She said this on Friday during the Public Presentation and Breakdown of the 2022 Appropriation Bill.

“Having witnessed two consecutive recessions, we have had to spend our way out of the recession which contributed significantly to the growth of our public debts,” the minister stated in Abuja, one day after President Muhammadu Buhari presented the Appropriation Bill to the National Assembly.

“It is unlikely that our recovery from these recessions would have been as fast without the sustained government expenditure funded partly by debt.”

Before now, the minister had said Nigeria will fund its 2022 budget deficit, pegged at N6.258 trillion, through fresh borrowings.

The move was greeted with controversy across the country. Critics and members of the opposition said the development, as well as other borrowings by the Federal Government, call for concern.

“Our party holds it as an act of wickedness that individuals who know that they will be leaving office in less than two years will be accumulating debts instead of seeking ways to reduce the liability they have brought upon our nation,” the Peoples Democratic Party (PDP) said following Buhari’s request for approval to borrow $4 billion and €710 million to fund the deficit in the 2021 budget.


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Nigeria’s Debt Still at Sustainable Level, Says Buhari
2022: Five Major Areas Nigeria’s Loans Will Be Focused On
2022 Budget: FG To Borrow More To Finance N6.258trn Deficit


 

Technically At War

Nigeria’s Minister of Finance, Budget, and National Planning, Zainab Ahmed says the borrowings are within “sustainable limits.”

 

But Zainab has explained that borrowings have helped the government in providing infrastructure to boost the economy.

“Borrowings are essential to enable us to deploy necessary capital expenditure and invest in human capital development,” she maintained.

According to her, with the country’s rising levels of insecurity, the government had to resort to borrowing.

“To compound matters, the country has technically been at war, with the pervasive security challenges across the nation,” the minister added.

“This has necessitated massive expenditures on security equipment and operations, contributing to the fiscal deficit; Defence and Security sector accounts for 22% of the 2022 budget!”

She further allayed fears over Nigeria’s debts, insisting the “debt level of the Federal Government is still within sustainable limits”.

2022: Five Major Areas Nigeria’s Loans Will Be Focused On

President Muhammadu Buhari on Thursday presented the 2022 Appropriation Bill before the National Assembly

 

President Muhammadu Buhari on Thursday submitted the 2022 Appropriation Bill before the Joint Session of the National Assembly in Abuja.

According to the President, the “Budget of Economic Growth and Sustainability” would have its deficit mainly funded by new borrowings totalling N5.01 trillion, N90.73 billion from Privatization Proceeds and 1.16 trillion Naira drawdowns on loans secured for specific development projects.

While arguing that the nation does not have a debt sustainability problem, but a revenue challenge; President Buhari assured the lawmakers and Nigerians that his administration is determined to tackle the revenue problems and ensure that debts remain sustainable.

READ ALSO: Nigeria’s Debt Still at Sustainable Level, Says Buhari

He further explained that his government has endeavoured to use the loans to finance critical development projects and programmes aimed at improving Nigeria’s economic environment and ensuring effective delivery of public services to our people.

For President Buhari, the loans acquired have been and will continue to be focused on:

1. The completion of major road and rail projects;

2. The effective implementation of power sector projects;

3. The provision of potable water;

4. The construction of irrigation infrastructure and dams across the country; and

5. The critical health projects such as the strengthening of national emergency medical services and ambulance system, procurement of vaccines, polio eradication and upgrading Primary Health Care Centres across the six geopolitical zones.

Speaking further about infrastructure financing, President Buhari disclosed that there will be some innovations.

According to him, in 2022, the government will further strengthen the frameworks for concessions and public-private partnerships (PPPs).

“Capital projects that are good candidates for PPP by their nature will be developed for private sector participation,” the President asserted.

He also disclosed that the present administration will also explore available opportunities in the existing ecosystem of green finance including the implementation of the nation’s Sovereign Green Bond Programme and leveraging debt-for-climate swap mechanisms.

The president enunciated that the strategies to improve revenue mobilisation will be sustained in 2022 with the goal of achieving four key objectives and they include:

Enhancement of tax and excise revenues through policy reforms and tax administration measures; review the policy effectiveness of tax waivers and concessions; boost customs revenue through the e-Customs and Single Window initiatives; and safeguard revenues from the oil and gas sector.


‘Hinged On Genuine Needs’: APC Defends Borrowing By Buhari’s Govt

File photo: President Muhammadu Buhari presiding over the Federal Executive Council (FEC) meeting in Abuja on August 18, 2021.

 

The All Progressives Congress (APC) says the President Muhammadu Buhari’s government is borrowing to address the country’s infrastructure deficit which would in turn stimulate the economy. 

Buhari had on Tuesday written to the National Assembly, seeking approval to borrow the sum of $4,054,476,863 billion and €710 million, a move critics and members of the main opposition Peoples Democratic Party (PDP), have faulted.

But in a statement on Wednesday, the APC accused the PDP of mismanaging the country’s economy when the party (PDP) was in power, explaining that the borrowings will create employment, and strengthen agriculture among others.

“From the foregoing, 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 –  uplifting the living standard of the citizens,” the statement signed by the National Secretary of the APC Caretaker/Extraordinary Convention Planning Committee (CECPC), Sen. John James Akpanudoedehe, read.

The APC, which accused the PDP of pushing the country into “insolvency” to the extent that some states were unable to pay workers their salaries, lauded the present administration for bailing out the states.

“In a welcome and commendable change, the Buhari-led administration through its economic management skills bailed out states to pay salary backlogs and embarked on large-scale infrastructure development projects that stimulated the economy and exited the era of insolvency and recession caused by the ineptitude of the PDP administration,” the statement added while praising the cooperation among the three arms of government.

According to the ruling party, the cooperation will “ensure good governance, particularly in the area of economic development.

“The country and citizens are the ultimate beneficiaries.”

Citizens Are Getting Poorer Because Nigeria Is Borrowing For Wrong Reasons – Peter Obi

 

A former vice presidential candidate of the Peoples Democratic Party (PDP), Peter Obi says Nigerians are getting poorer because the government is borrowing for the wrong reasons.

Mr Obi, who was a guest on Channels Television’s Sunday Politics, argued that while it is not a crime to borrow money, the funds must be used solely for productions that enhance the lives of the citizens and enrich the economy.

“Are you borrowing for productivity or are you borrowing for consumption? My worry here is that we are borrowing for consumption.

“I am saying that the country is not productive and there is nothing wrong in borrowing; if you are borrowing, then it shouldn’t be for consumption and that’s why more and more people are getting poorer,” he asserted.

According to the former Anambra State governor, the nation’s Gross Domestic Product (GDP) cannot be growing while the people are getting poorer.

He believes the growth Nigeria needs is one which “pulls people out of poverty by making the people have disposable income and be able to feed themselves”.

Mr Obi further added that the nation needs the kind of growth that will educate the children and provide primary health care for all communities.

“These are critical areas we want to go into,” the statesman stressed, noting that Nigeria must do away with speculative growth that is given media hype without positively affecting the masses.

READ ALSO: Make Sacrifices To Tackle Insecurity, Jonathan Tells Nigerians

Engine of Growth 

In a bid to chart a way forward, the astute businessman said that the biggest engine for economic growth is the micro, small, and medium enterprises.

“That engine today is not being supported in Nigeria. Nigeria has a total of 40 million SMEs but there is not properly articulated fiscal and monetary policy to support the critical sector.

“The entire loan to the private sector in Nigeria today is about N30 trn. Less than N1.5 trn is going to SMEs. This is less than five per cent of the entire loan. This means Nigeria is not supporting its engine that can enhance the nation’s economic growth.

“The SMEs are the biggest employer of labour in many advanced countries of the world. We need fiscal monetary policies that would invest in this engine of growth in order to create jobs.”

Peter Obi’s comments are coming about two weeks after Nigeria’s GDP grew by 5.01% (year-on-year) in real terms in the second quarter of 2021.

According to the National Bureau of Statistics (NBS), the increase in the GDP index marked three consecutive quarters of growth following the negative growth rates recorded in the second and third quarters of 2020.

But the PDP stalwart maintained that the development is not a thing to rejoice about.

Recession: Nigeria Must Stop Borrowing – Atiku

Supreme Court To Hear Atiku's Appeal August 20
A file photo of former Vice President Atiku Abubakar.

 

Former vice-president Atiku Abubakar says Nigeria needs to stop borrowing to avert sliding into a further recession.

Atiku, on Sunday, in a series of posts on his official Twitter handle reacted to Nigeria’s economic slip into recession.

In his statement titled, ‘We Must Exit This Recession With Precision,’ Atiku said it is a very heavy heart that he received the news which confirms that for the second time in five years, Nigeria has entered into another recession.

He said the nation must stop borrowing for anything other than essential needs adding that, the more the country keeps borrowing, the more it stands the risk of defaulting.

READ ALSO: Recession: SERAP Asks Buhari To Cut Cost Of Governance

“The more we borrow, the more we will need cash to make interest and principal payments, and the less cash we will have to make necessary investments in our economy and our people.

“If we keep borrowing, we stand the risk of defaulting, and that will make recession a child’s play because we will lose some of our sovereignty,” he said.

Atiku also called on President Muhammadu Buhari to heed to the patriotic counsel given by himself and other well-meaning Nigerians on cutting the cost of governance.

 

 

See his full statement below…

We Must Exit This Recession With Precision.

It is with a very heavy heart that I received the confirmation that for the second time in five years, #Nigeria has entered into another #recession.

Heaviness of heart, because this could have been avoided had this administration taken heed to the patriotic counsel given by myself and other well-meaning Nigerians on cutting the cost of governance, saving for a rainy day, and avoiding profligate borrowing.

Yes, the COVID19 pandemic has exacerbated an already bad situation; however, we could have avoided this fate by disciplined and prudent management of our economy.

Be that as it may, it serves no one’s purposes to quarrel after the fact. We must focus on solutions. Nigeria needs critical leadership to guide her back to the path of economic sustainability.

We cannot afford hand wringing and navel-gazing. We must act now, by taking necessary, and perhaps painful actions.

For a start, the proposed 2021 budget presented to the National Assembly on Tuesday, October 8, 2020, is no longer tenable.

Nigeria neither has the resources, or the need to implement such a luxury heavy budget. The nation is broke, but not broken. However, if we continue to spend lavishly, even when we do not earn commensurately, we would go from being a broke nation to being a broken nation.

As a matter of importance and urgency, every non-essential line item in the proposed 2021 budget must be expunged.

For the avoidance of doubt, this ought to include estacodes, non-emergency travel, feeding, welfare packages, overseas training, new vehicle purchases, office upgrades, non-salary allowances, etc.

Until our economic prospects improve, Nigeria ought to exclusively focus on making budgetary proposals for essential items, which include reasonable wages and salaries, infrastructural projects, and social services (citizenry’s health, and other human development investments).

Additionally, we have to stimulate the economy, by investing in human development and increasing the purchasing power of the most vulnerable of our population. Only a well-developed populace can generate enough economic activity for the nation to exit this recession.

We must invest in those most likely to be impacted by the effects of the recession, the poorest of the poor. As well as stimulating the economy, this also ensures that they do not slip further into extreme poverty.

For example, a stimulus package, in the form of monthly cash transfers of ₦5000 to be made to every bank account holder, verified by a Bank Verification Number, whose combined total deposit in the year 2019 was lower than the annual minimum wage.

For example, a stimulus package, in the form of monthly cash transfers of ₦5000 to be made to every bank account holder, verified by a Bank Verification Number, whose combined total deposit in the year 2019 was lower than the annual minimum wage.

Now, how will this be funded? By more profligate borrowing? No. I propose a luxury tax on goods and services that are exclusively accessible only to the super-wealthy. A tax on the ultra-wealthy to protect the extremely poor.

A practical approach to this is to place a 15% tax on all Business and First Class tickets sold to and from Nigeria, on all luxury car imports and sales, on all private jets imports and service charges, on all jewelry imports and sales, on all designer products imported, produced or sold in Nigeria, and on all other luxury goods either manufactured or imported into Nigeria, with the exception of goods made for export.

The proceeds of this tax should be exclusively dedicated to a Poverty Eradication Fund, which must be managed in the same manner as the Tertiary Education Trust Fund, or the Ecological Fund.

I further propose that a 1% poverty alleviation tax should be legislated by the National Assembly on the profits of every International Oil Company operating in Nigeria, and international airlines doing business in Nigeria, which should also go towards the proposed Poverty Eradication Fund.

It is inhumane for us as a nation to increase the cost of goods and services that affect the poor, while keeping the cost of luxuries fairly stable. We must flip this, and flip it immediately.

And above all, Nigeria must stop borrowing for anything other than essential needs. Again, for the avoidance of doubt, borrowing to pay salaries, or to engage in White Elephant projects, is not an essential need.

This is particularly important as we need cash at hand because the world and our economic and development partners are also focused on helping their home economies overcome the effects of COVID19. We must be our own saviors.

The more we borrow, the more we will need cash to make interest and principal payments, and the less cash we will have to make necessary investments in our economy and our people.

If we keep borrowing, we stand the risk of defaulting, and that will make a recession a child’s play because we will lose some of our sovereignty.

I urge the administration of President Muhammadu Buhari to swallow its pride, and accept its limitations, so that they can open their minds to ideas, without caring who the messenger is.

For as Deng Xiaoping said, “It doesn’t matter whether the cat is black or white, so long as it catches mice.”

‘We Just Have To Take Loans’, Buhari Justifies Borrowing To Fund Infrastructure

 

President Muhammadu Buhari on Tuesday justified government borrowing to finance infrastructure, asserting that his government took loans in the interest of the country to solve the dire shortfall in infrastructure.

Speaking at a virtual meeting with members of the Presidential Economic Advisory Council (PEAC) at the State House, in Abuja, President Buhari said the country must fix its roads to save lives from soaring road accidents.

“We have so many challenges with infrastructure. We just have to take loans to do roads, rail and power, so that investors will find us attractive and come here to put their money,” the President said after listening to a presentation by PEAC chaired by Professor Ayo Salami.

He regretted that the failure to provide the infrastructure for effective transportation deprived the country of its well-deserved status as the West African hub for Air cargo transportation and trans-shipment of goods.

On the issue of the economy, President Buhari noted the challenges posed by the “collapse of the oil market” and the decision of government to abide by the reduced oil production quota allocated by the Organisation of the Petroleum Exporting Countries (OPEC).

“We have to accept that decision; otherwise they (Middle-East producers) can flood the market and make the product unviable. So we have cooperated with what we get. With oil, we are in a difficult situation. The politics of oil is that the less you produce, the less you earn,” he said.

President Buhari also stressed the position of agriculture in the government’s scheme to reduce joblessness and poverty.

“For us to bounce back to productivity, especially in agriculture, the unemployed with many of them uneducated had to be persuaded to go into agriculture.

“If we hadn’t gone back to the lands we would have been in trouble by now. That is why we virtually stopped the importation of food thereby saving jobs and foreign exchange.”

The President also broached the issue of COVID-19 pandemic and how it necessitated the recent government policies as they relate to energy (electricity) and fuel.

He said the Federal government took such decisions because it places the country above politics.

“COVID has reduced us to the same level as developed countries.

“We are lucky we went back to the land. We eat what we produce. We are doing our best to secure the country and provide infrastructure for investment to be viable in the country,” he said.

Commending the Chairman and the members of the council for their patriotism and service to the nation, President Buhari pledged to continue to draw from their wisdom, knowledge and experiences as the nation deals with challenging economic times.

Earlier, Prof Salami had in his presentation highlighted the Council’s recommendations on poverty reduction and stimulation of non-debt investment inflows, as promised at their last meeting.

The council recommended steps for the effective implementation of government’s plan to lift 100 million Nigerians out of poverty, as well as measures to curb poverty disparity in Nigeria.

The council promised to set out a full policy paper that would, in the first instance, stop more Nigerians from falling into poverty and thereafter, further plans on reducing the poverty headcount in the country.

The PEAC also outlined a number of measures aimed at aggressively increasing the country’s non-debt investment inflow, including measures to improve investor perception of the country and the proposed establishment of a 5 billion – 10 billion dollars investment and growth fund to invest in.

The PEAC used the opportunity of the meeting to express support and solidarity with the administration on its recent policies.

It listed the implementation of reforms encapsulated in the Companies and Allied Matters Act (CAMA) 2020 recently signed into law, the reforms in the energy sector, bringing electricity and fuel prices in line with the market, and the decision of the Central Bank of Nigeria to merge the exchange rate of the naira versus other foreign currencies.

$29.96bn Loan Request: Senate Committee To Submit Report In Two Weeks

 

The Committee on Local and Foreign Debts assigned to review the 2016 – 2018 External Borrowing Plan request sent by President Muhammadu Buhari is expected to present their reports in two weeks.

The President’s request was forwarded to the Committee for further legislative work following its presentation by the Senate Leader, Yahaya Abdullahi, during plenary.

The Committee has Senator Clifford Ordia (PDP, Edo Central) as Chairman and Senator Bima Mohammed Enagi (APC, Niger South) as Vice Chairman.

READ ALSO: Senate Will Approve Buhari’s $29.96bn Loan Request, Says Lawan

President Buhari had in a letter dated November 26, 2019, said the Eighth National Assembly approved only a part of the External Borrowing request forwarded to it in September 2016.

This, according to him, stalled the Federal Government’s implementation of critical projects spanning across the mining, power, health, agricultural, water, and educational sectors.

President of the Senate, Ahmad Lawan had said that the Senate would approve President Muhammadu Buhari’s request to borrow $29.96 billion.