President Muhammadu Buhari’s administration’s desperation for the $800 million from the World Bank despite having less than two weeks to leave the seat of power has continued to be a severe concern to Nigerians.
According to the Debt Management Office, as of the Fourth Quarter of 2022, the total debt stock was N46.25 trillion excluding the Central Bank of Nigeria’s Ways and Means loan to the federal government of N22.7 trillion the National Assembly recently approved under the behest of Buhari.
Notably, from January to date, the Country has acquired additional debts, pushing the debt figure to over N80 trillion.
At the inauguration of Buhari’s administration in 2015, Nigeria’s debt profile was N12.6 trillion but has now jumped to over N80 trillion in 2023.
The $800 million subsidy palliative loan from the World Bank is a singular case. Despite calls from stakeholders for the current government to suspend the loan approval, Buhari wrote the National Assembly on Wednesday to consider approval of the loan request.
On Wednesday, the Senator representing Borno South and chairman of the Senate Committee on Army, Mohammed Ndume, threatened to challenge the $800 million loan sought by President Muhammadu Buhari’s administration.
Earlier, the Socio-Economic Rights and Accountability Project urged the World Bank President, Mr David Malpass, to suspend any disbursement of $800 million loan to the Federal Government.
Both individuals and groups have not hidden their displeasure with another stream of borrowing by the outgoing government.
Unperturbed about public outcries, the Buhari government has continued showing avarice for loans, whether needed or needless. During the last National Executive Council meeting, the Minister of Finance, Budget and National Planning, Zainab Ahmad, hinted at the suspension of fuel subsidies removal. Despite the mixed reactions that thrilled about the move, it did not last as Ahmed made a U-turn noting fuel subsidies were not suspended; rather, the discussion was extended to allow the incoming government to take the front seat. Arguably, the truth of fuel subsidy removal is stranded in misapprehension; perhaps the incoming government would unravel it. Most importantly, Nigeria’s ballooning debt burden should worry the incoming government.
Speaking on the implication of Nigeria’s debt profile, the World Bank said the Country spent 96.3 per cent of its revenue for 2022 on debt servicing. Although the Finance Minister, Ahmed, said the figure is 80.6 per cent, this can be, it is a pain for the Country. By implication, the situation would affect the economic well-being of Nigeria because it would lessen investment in infrastructure, human capital and other laudable enterprises.
No wonder the Director General of the Budget Office, Ben Akabueze, said trouble is imminent while reacting to the Nation’s debt figure.
Abakueze addressing members-elect of the 10th National Assembly at their week-long induction ceremony in Abuja a week ago, pointed out that while Nigeria remains healthy with its debt-to-GDP ratio, the Country is not with its debt-to-revenue ratio.
“Even on the African continent, the spending ratio is about 20 per cent. South Africa is about 30 per cent; Morocco is about 40 per cent. And at 15 per cent, that is too small for our needs. That is why there is fierce competition for the limited resources.
“That can determine how much we can relatively borrow. We now have minimal borrowing space, not because our debt to GDP is high, but because our revenue needs to be more significant to sustain the size of our debt.
“That explains our high debt service ratio. Once a country’s debt service ratio exceeds 30 per cent, that Country is in trouble, and we are pushing towards 100 per cent, and that tells you how much trouble we are in,” he said.
The warning signal resonated more as Nigeria battled to raise annual revenue of N10 trillion in 2022, almost swallowed by debt servicing payments.
Amid the circumstances, Nigerian NewsDirect notes that the federal government must halt plans to seek approval for another $800 million from the World Bank.
Here, the House of Representatives and Senators must do Nigeria one last good thing: reject Buhari’s approval for another loan.
If Buhari must get another loan, he should account for the previous loans acquired under his administration.
More Nigerians should speak out against acquiring another loan in the twilight of Buhari’s exit.
Nigerian NewsDirect unequivocally stands against additional borrowing in whatsoever nomenclature by Buhari’s administration.