Why Nigeria Must Continue To Borrow Responsibly – Senate President

 

President of the Senate, Ahmad Lawan, has explained why it is important for the Nigerian government to continue to borrow responsibly to fund critical projects in the country.

He believes it is not feasible for the government to tax the people further in the face of the present economic situation and the nation’s infrastructure must be developed.

The Senate President made the remarks on Thursday while briefing State House correspondents after a closed-door meeting with President Muhammadu Buhari in Abuja, the nation’s capital.

“You cannot, in my view and judgement, tax Nigerians further for you to raise the money for infrastructural development; other countries do that, but we have serious situation across the country.

So, you cannot put taxes on the people. The only option left is for use to borrow responsibly, utilise prudently and economically, and ensure that the projects are self-sustaining; that they can pay back the loans,” he said.

Senator Lawan added, “Our options are really very limited as a country. First, we do not have the necessary revenue; Nigeria is poor, we should not deceive ourselves. Nigeria is not rich given the circumstances we live in, given the challenges we have.

“Our resources are so low, our revenues are so low; therefore, the option of not doing anything just to sit (because we have no money, we should not go for infrastructure development) is not an option worthy of consideration. You cannot keep the economy stagnant.”

 

Investors Not Willing

He gave the assurance that the National Assembly would give legislative approval to the Executive loan request to fund the 2021 Appropriation Act before it embarked on a recess in July.

The lawmaker reiterated that the 2021 Supplementary Bill would also go through final consideration before the recess to fast-track the government’s procurement of COVID-19 vaccines and military hardware to tackle insecurity.

Senate President, Ahmad Lawan, briefs reporters after a closed-door meeting with President Muhammadu Buhari in Abuja on June 24, 2021.

 

While stressing the need to borrow funds, he stated that the Legislature would not just support or approve loans for the executive.

The Senate President noted that this would be done only after investigating the implementation of such loans through oversight functions to ensure that they were directly deployed for intended projects.

According to him, Nigeria has no other choice than to borrow money and the option of private-public partnerships and Internally Generation Revenue (IGR) was not worthy of consideration.

Senator Lawan said, “What I want to assure Nigerians here is that we are not going to be frivolously supporting or approving loans for the Executive arm of government; whenever we have to approve any loan, we will insist on the details of the funding to look at the conditions that are attached to the loans and they must be favourable conditions before we approve.”

“The other option is probably private partnership – you need to create the environment to attract investors to come into your country. Because of the security challenges we face today, not many investors would like to come to Nigeria.

“In fact, even those inside Nigeria may not like to invest properly in the sector of infrastructure development,” he said.

Falana Calls For Probe Of Conditions In Nigeria’s $79bn Foreign Loans

 

Human rights lawyer and Senior Advocate of Nigeria (SAN), Mr Femi Falana has called on the National Assembly to probe the conditions of Nigeria’s foreign loans totalling about $79.5bn.

Speaking during an interview on Channels Television’s Politics Today on Monday, Falana wondered why much emphasis should just be on the $3.1billion to be secured from China.

According to him, the masses are being misled by leaders of the ruling All Progressives Congress (APC) and those of the opposition Peoples Democratic Party (PDP).

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“We are being misled. What is the basis of this cessation about Chinese loan which is only $3.1billion out of $79billion loan?

A file photo of Mr Femi Falana.

“Why are we not talking about the remaining $76billion whose conditionality is much worse than the Chinese loans we are talking about?

“So, why don’t you look at the entire loan portfolio? Look at the conditions. For instance, some of the western loans are to the effect that the government should increase electricity tariff, increase fuel price and so on and so forth,” he said.

Falana also knocked the federal lawmakers for “not complaining about those multiple taxations dictated by western imperialism.”

While admitting that every country has the right to enter into an agreement with issues relating to loans, the senior lawyer maintained that the National Assembly is required by law to look at the terms and conditions.

In doing this, Falana asked the Ministry of Justice to always scrutinise the terms and conditions of the agreements to the benefits of all Nigerians.

FG Borrows $1.6Bn To Aid Power Transmission

The Minister of Power, Professor Chinedu Nebo said the Federal Government has borrowed $1.6 billion (about n240 billion) foreign loans for the expansion of power transmission facilities in the country.

The Minister said this, after a meeting of the Presidential Action Committee on Power (PACP) at the presidential villa.

The closed door meeting, which lasted for over two hours, was presided over by President Goodluck Jonathan, and it had in attendance the Vice President Mohammed Namadi Sambo and several other ministers.

According to Professor Nebo, the loan is coming from the World Bank, the African Development Bank, the Euro Bond Issue and the Chinese Exim Bank.

He said: much of the deliberations cantered on expanding the transmission network in Nigeria to ensure that all the power generating plants that Nigeria is now building and commissioning, have adequate capacity to pull out power.