9th September, 2013
The administration of President Goodluck Jonathan is currently wallowing in huge debts due to Nigeria’s reckless borrowing to fund its profligate policies at the expense of more pressing needs of the people. Yet, the country keeps obtaining more foreign loans. Though most Nigerians may not have been asking questions relating to the reasons the country’s government has resorted to borrowing from financial institutions abroad, the fear is that it may further worsen the already comatose economy.
In the middle of this year, the Debt Management Office, DMO, said the total debt profile of the country is N7. 93 trillion. This includes local and international debts. Surprisingly, the Federal Government, a few weeks after the release by the DMO, excitedly announced to Nigerians that it was going ahead to secure another $3 billion as loan from China as part of the $7.9 billion external borrowing plan approved by the National Assembly last year. It explained that the loan was to build infrastructure in the country that prides itself as Africa’s most populous country, but where the living standard of an average citizen is one of the worst in the world.
According to the Minister of Finance and coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, the agreed loans, which come instalmentally, would be based on an interest rate of less than three percent over a 15-20-year period. The loans, according to the government, includes $500 million to build airport terminals in Lagos, Abuja, Port Harcourt and Kano; over $700 million to build a hydroelectric power plant in Niger State, and $600 million to build a light rail in Abuja, Nigeria’s capital.
Though economists would argue that a country cannot survive without some level of borrowing, in the Nigerian situation, it becomes lamentable that the citizens only hear of the loans, but do not see what the government does with them. There are no roads, electricity, the education system is in shambles, there is growing unemployment and a very terrible state of insecurity.
Between 2005 and 2006 the country paid huge sums to clear loans from international creditors of London and Paris clubs that had weighed us down for years. Today, the same Okonjo-Iweala who spear-headed the clearing of the debt and said it was in the best interest of the country, is the same woman trying to convince the people that the current loans would not jeopardise the economy. She has dumped the policy she was privy to which then limited borrowings by both the federal and state governments.The question is: who is Okonjo-Iweala actually working for? Nigeria or the international lending institutions?
With the DMO raising the alarm that Nigeria’s outstanding debt would rise to N8.809 trillion or $55.4 billion by 2015 as contained in the country’s debt strategy for the next three years, we urge Nigerians to prevail on the government to stop this reckless borrowing, which the state governments have also started imbibing, without anything to show for it. The future of this country should not be mortgaged through huge debts by its minders.