The increasing debt profile of Nigeria has most recently become a topical matter sparking turbulent concerns. This has mostly attracted reservations and emotional disturbances, particularly when consideration is given to what posterity holds for the Country in the face of rising debt stock. The acquisition of more external loans obtained by the present administration with little or no impact felt on the performance profile of the economy has further heightened the fear of the fate that awaits the Country in the nearest future. The subject of deepening situations of a falling economy despite huge loan stock is one of a paradox that leaves a sad expression on the faces of Nigerians.
It would be recalled that the Minister of Finance, Budget and National Planning, Zainab Ahmed, had late last year in November, disclosed that Nigeria’s public debt stock is projected to rise to N38.68 trillion by December 31, 2021. It was then disclosed that the Federal Government planned to borrow N4.28 trillion from domestic and foreign sources to finance the 2021 budget deficit of N5.20 trillion, which represents 3.64 percent of estimated GDP. According to information from the Debt Management Office (DMO), Nigeria’s debt profile as at September 2020, stands at N32.2trillion. The troubles of economic downturn has begun to raise doubt by the populace against the sincerity of the Government over the acquisition and use of loans for the right objectives they were meant for.
It has been gathered that the construction of the Ibadan-Kano rail project is awaiting approval of the Chinese government for a loan application by the Nigerian government to the sum of $5.3bn. Minister of Transportation, Rotimi Amaechi had over the weekend in a broadcast programme — “Weekend Deal” — on the Nigeria Television Authority (NTA), was quoted: “We are waiting for the Chinese government and bank to approve the $5.3bn to construct the Ibadan-Kano. What was approved a year ago was the contract. The moment I announced that the federal government had awarded a contract of $5.3bn to the China Civil Engineering Construction Corporation, CCECC to construct Ibadan-Kano; they assumed the money had come in. No! Up till now, we have not gotten the money a year after we have applied for the loan; we have almost finished the one of Lagos-Ibadan. If we don’t get the loan now, we can’t commence.”
It has been disclosed that upon completion, the Ibadan-Kano rail would link the Kaduna-Kano-Abuja-Minna-Ilorin-Oshogbo-Ibadan where cargoes could be moved to Kano from Lagos. It is paramount that the processes guiding the execution of government projects be overhauled to give relevance and priority to openness and accountability, particularly putting in view the risk posed before the Country if infrastructures built on the platter of borrowed funds suffer the fate of failure, owing to systemic deficiencies. The cry of Nigerians over the increasing borrowing of funds has been anchored on the fact that there are no concrete results to show and account for funds which have been borrowed in the name of capital projects in the Country.
Realities have shown the weakness of the prevailing system in engendering the desired objectives for borrowed funds. The overarching preponderance of systemic leakages with the attendant corrupt tendencies over the desired goal of fostering capital projects which borrowed funds are properly meant for, have continued to defeat the essence of huge loans acquired over the years. It is therefore essential that the processes that form the structural patterns of capital projects be overhauled and sanitised with vibrant modifications and reconstitution where possible, in order to sanitise the system from the tendencies of foul-play which have been frustrating the achievements of desired purposes.
Nigeria’s rising debt is a source of concern. It will spell doom for the Country if the acquisition of loans are sustained while there is in existence, systemic leakages frustrating achieving the desired objectives for borrowings. It Is therefore essential for the Presidency and the National Assembly to work harmoniously on instituting new standards to guide the execution of capital projects generally, and in particular when attention is given to those meant to be financed with borrowed funds. Continuous borrowings without addressing the prevailing leakages will continue to create circumstances with forces of frustration against desired enhancement of capital projects towards strengthening the economy. It is essential that the Presidency consider the importance of spearheading a full grip on the necessity for redirecting the course of project execution with strong monitoring and efficient system required for the reformation of the economy for growth and development.