This week, spurning public outcry, the Senate President, Ahmad Lawan, gave the Senate Committee on Foreign and Local Debt a week to consider President Muhammadu Buhari’s latest loan request. The Senate is currently doing legislative work on President Buhari’s request for the approval of Multinational Fund Projects under the 2018 -2021 Federal Government External Borrowing (Rolling) Plan. Recently, Buhari had requested the Red Chamber’s approval of $4.054bn, €710m and $125m external borrowing. According to him, the projects listed in the 2018-2021 Federal Government Borrowing Plan were to be financed through sovereign loans from the World Bank, French Development Agency (AFD), China-Exim Bank, International Fund for Agricultural Development (IFAD), Credit Suisse Group and Standard Chartered/China Export and Credit (SINOSURE) in the total sum of USD4,054,476,863.00; Euro 710,000,000.00 and Grant Component of USD125,000,000.00.
The money, he said, would be used to fund federal and state government projects cutting across key sectors such as infrastructure, health, agriculture and food security, energy, education, human capital development, and COVID-19 response efforts. For good measure, he added that the projects spread across the six geopolitical zones of the country would bring about employment generation and poverty reduction, as well as protection of the most vulnerable and very poor segments of the Nigerian society. But the move has been received with outrage in the polity, in large part because the government is approaching a N40 trillion debt level with little or nothing to show for it. This is why the Nigerian public and civil society have been up in arms against it.
For instance, a prominent group, the Socio-Economic Rights and Accountability Project (SERAP), urged the leadership of the National Assembly to reject Buhari’s fresh request until the details of expenditure on all loans obtained since May 29, 2015 by his administration were made public. In a statement signed by its deputy director, Kolawole Oluwadare, the organisation expressed concern about the growing debt crisis, the lack of transparency and accountability in the spending of loans obtained, and the perceived unwillingness or inability of the National Assembly to vigorously exercise its constitutional duties to check the apparently indiscriminate borrowing. Former President Olusegun Obasanjo, whose administration secured massive debt relief for the country, also weighed in, flaying the government’s practice of borrowing for recurrent expenditure. As he noted, “If we are borrowing for development that can pay for itself, that is understandable, but then how long will it pay for itself? But we are borrowing and accumulating debts for the next generation and the next generation after it. It is criminal, to put it mildly.”
Of course, the Buhari administration has always had a ready alibi for its borrowing spree: infrastructure building. The president repeated this alibi while speaking with members of the Presidential Economic Advisory Council (PEAC) at a virtual meeting held at the Presidential Villa, Abuja, last week. According to him, his government took loans in the interest of the country, specifically to solve the dire shortfall in infrastructure. But this infrastructure claim is spurious, to say the least. There is hardly anything on the ground to justify the humongous debts accumulated by the administration. Only last week, the Debt Management Office (DMO) decried the rising debts. It revealed that the Federal Government, state governments and the Federal Capital Territory (FCT) owed a total of N35.465 trillion by the end of June. This is apart from the at least N10 trillion overdraft taken from the Central Bank of Nigeria (CBN), which is already long overdue for settlement. The figure is an increase of N2.358 trillion in the debt stock from the end of the first quarter of the year to the end of the second quarter: the total debt figure stood at N33.107 trillion or USD87.239 billion as of March 31, 2021.
It is indeed a tragedy that Nigerians have to go on their knees, as it were, pleading with the Lawan-led National Assembly to curb the Buhari government’s ceaseless accumulation of unsustainable debts. To be sure, the administration would not be consistently expending the country’s scarce resources on debt service payments if the country had a parliament alive to its constitutional responsibilities. With the way it has conducted its affairs so far, the Lawan-led National Assembly has proven to be Nigeria’s most pliable, flippant and shiftless legislature since the return to civil rule in 1999. It has made a mockery of the democratic process by turning federal lawmakers into courtiers of the Executive. It has hobbled nation building through oversight failures. That is why, rather than advocating and fighting for improved access of poor and vulnerable Nigerians to basic public services and human rights, it has been busy enabling the whims and caprices of the executive.
The National Assembly has tried to justify the debts citing the country’s debt-to-GDP ratio. It has behaved as if the international economy is denominated in the naira. Just how can you be mouthing debt-to-GDP ratio all the time when you spend most of your earnings on debt servicing? What production is this government encouraging? How can it be a thing of joy that about 98 per cent of earnings is now expended on debt servicing? With the way things stand, Nigerians may need to force the hands of these legislators; they need to be brought back to earth. It is a crime to sit in Abuja and fashion the country after a defective vision. They are undermining the country’s future with unconscionable loan approvals.