31st October, 2016
Dr. Titus Okunronmu, a former Central Bank of Nigeria (CBN) Director, on Monday, commended the Federal Government for its plan to borrow $29.9 billion to finance infrastructure development in the country.
Okunronmu, an ex-staff of the CBN’s Budgetary Department, told the News Agency of Nigeria (NAN) in Ota, Ogun, that borrowing to revamp infrastructural deficit was a welcome idea.
NAN reports that President Muhammad Buhari had on Oct. 25 written to the National Assembly seeking approval to borrow $29.9 billion to finance the nation’s infrastructure development from 2016 to 2019.
President Buhari’s letter said it had become necessary to resort to prudent external borrowing to bridge the financial gap.
He added that the monies would be applied to key infrastructure projects including power, railway and road project amongst others.
Okunronmu said: “If the Federal Government borrows for development, it is good and realistic, but borrowing for consumption is counter-productive to the economy’’.
He said that borrowing for investment, not for consumption, would have positive impact on the economy and boost economic growth.
The ex-CBN director said that the expected revenue in 2016 budget was not enough to cover the recurrent expenditure, so the government had to resort to depending on domestic and external borrowing.
He urged the federal government not to borrow from the nation’s banking sector because borrowing from local banks would put more money in circulation, causing inflation.