Buhari’s proposed $30 Billion Loan

President Muhammadu Buhari shocked a lot of economic and financial experts by asking the National Assembly (NASS) to approve $29.96bn worth of loans to cover budgetary deficits for the years 2016 to 2018. It is important to urge the lawmakers not to be in a hurry to approve it.

The commitment of a nation and its distant future to a debt of this magnitude is certainly too vital to be left to politicians in Abuja to decide entirely on their own. It is our lives and our future and those of our children and grandchildren that they are gambling with if this mind-boggling request is not carefully considered. Indeed, all the state governors, irrespective of political affiliation, should make it clear to President Buhari, on behalf of their people, that the people of Nigeria want to have a say in whether they want to be enslaved by this huge indebtedness.

Nigerians will be startled to know that this loan request will add 200 per cent to the existing loan stock in one fell swoop. To call it desperate is to understate the impression it creates on most economists and financial experts. At the moment, nearly 45 per cent of the Federal Government’s recurrent expenditure is being spent servicing debt. What percentage of revenue will thereafter be committed to debt repayment by the time the debt stock goes through the roof? Where is the ability to repay this colossal sum as and when due? That the Federal Government might not be able to pay its staff salaries for the rest of the year is one major reason given for this panic measure. Since January, the crude oil revenue estimates for each month consistently fell short and it was obvious that the target for the budget would not be met.

Yet, those charged with the responsibility of running government were busy assuring Nigerians that the 2016 budget would be fully implemented. We should also not forget that the same government is asking the African Development Bank (ADB) to speed-up the $1bn loan promised by its President, Dr Akinwunmi Adesina. It has become even more obvious that President Buhari needs a brand new Economic Team whose work will not only be to help him in exploring better ways of internally growing the revenues we need to service the economy, but also to create a borrowing strategy that is sustainable. We expect the National Assembly to rigorously apply its constitutional power of federal financial control to ensure that we borrow responsibly and spend prudently. We must also insist that no section of the country is excluded from the pain and gain of any borrowing plan of this administration.