Nigeria's rising debt worries opposition party

Chief Bisi Akande

Chief Bisi Akande

The Action Congress of Nigeria (ACN) has decried the country’s rising external debt, saying it negates everything the Federal Government
told Nigerians when it paid 12 billion dollars to get a debt relief of 18 billion dollars in 2005.

In a statement issued in Lagos on Sunday by its National Publicity Secretary, Alhaji Lai Mohammed, the party said it is shocked and saddened to learn that less than seven years after the much-celebrated debt relief, which supposedly wiped the country’s debt slate clean, Nigeria’s external debt has risen to 5.9 billion dollars and, when the domestic debt is added, a whopping 44 billion dollars!

To service this debt in 2012 alone, it said, some 559.6 billion naira (more than the allocation to Education and power combined in the budget) has been earmarked, even at a time the economy is wallowing in an incredible paradox of achieving growth without engendering development.

”It is time to ask questions about the gains of the debt relief that Nigeria got in 2005. Where is the better life that the PDP-led federal
government promised Nigerians after the debt relief? Where are the massive foreign investments promised? Where are the jobs that Nigerians were told will be created since the country would no longer need to spend billions of naira to service its debt? What did Nigeria gain from paying 12 billion dollars that could have been used for, if nothing else, massive infrastructural development?

”We are bound to ask these questions because all we have heard is that Nigeria’s debt profile is rising alarmingly again, that huge funds are still being spent to service the debt, and that the debt could rise by another 7.9 billion dollars as President Goodluck Jonathan has forwarded a request to the National Assembly to approve a plan to borrow that amount,” ACN said.

The party said before the ever-paranoid PDP will accuse it (ACN) of playing politics with this serious issue, it will like to quote from
what then President Olusegun Obasanjo – elected on the platform of the PDP – and then (and current) Minister of Finance Ngozi Okonjo-Iweala – now
co-opted into the PDP – said while basking in the glory of the 2005 debt relief.

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Obasanjo: ”There is nothing like freedom, freedom from debt and the image that the debt relief and exit from Paris Club debt give to Nigeria .The debt relief has brought benefits to Nigerians and that it first represents a direct saving on debt-service repayment, interest, surcharges and other fees. It also improves the country’s worthiness in the global community and builds credible financial confidence for
transactions. More investment would start to flow into Nigeria knowing we are no more classified as a bad and doubtful debt country. The debt relief is expected to create jobs and new wealth with new investments, which would translate into improved standard of living.”

Okonjo-Iweala: “The fact that we have this debt reduction and we will be able to pay off the balance of whatever is left will leave Nigerians free, to start on a new slate. I mean it will be like a second independence, a rebirth, if you will, giving us the freedom to focus squarely on our economic activities. It means that generations who would have been paying these debts in future will not have to pay it. And I think that is something that our children will appreciate
and thank the President and thank the team and thank every one who has contributed to these all”.

ACN said contrary to the picture of Utopia painted by then President and his Finance Minister, Nigerians are sadly worse off today than they were in 2005: no jobs, no power, no water, no roads, no hope, and the only investments we have witnessed are investments into the pockets of the fat cats!

”This is why we are now calling on the National Assembly to step in to investigate why Nigeria has reaped pains instead of gains from the
much-ballyhooed debt relief, and to stop this freewheeling borrowing before the country becomes fully ensconced in another debt quagmire, after which Nigerians will then be conned into making another huge payment to secure yet another meaningless debt relief!

”We are also urging the federal government to stop violating the Fiscal Responsibility Act, 2007, by pegging its borrowing at an approved limit. Let no one assault our sensibilities further by saying that the current total external debt sum is still within the so-called threshold of what is acceptable internationally. That cannot provide any succour for a people who have been laid prostrate by poor and irresponsible governance since the country’s return to democracy in 1999!” the party said.