Debt Overhang Of $84bn: Nigerians Express Discomfiture Over Buhari’s Plans To Borrow Extra $30bn

The Oasis Reporters

December 2, 2019

The Emir of Qatar, His Highness Sheikh Tamim bin Hamad Al-Thani, with Nigeria’s President Muhammadu Buhari at State House, Abuja, recently.
File photo

A common adage in business parlance holds that borrowing for consumption is bad, but borrowing for business growth with a clear Return on Investment plan is wise, especially if the payback terms are not ruinous, but clearly visible.

In the light of that, Nigerians stayed glued to their television sets watching a former deputy governor of Nigeria’s Central Bank which is the largest African nation’s reserve bank, Dr Obadiah Mailafiyah debate ideas and proffer solutions with an expert budget analyst, Dr. Ben Akabueze, in a Channels TV interview.

In the interview and discussion program, Dr Mailafiyah stated that this All Progressives Congress, APC government inherited a debt of $7billion from the previous People’s Democratic Party, PDP government of Dr. Goodluck Jonathan, but currently has a debt overhang of $84billion.

Simply put, it means that having inherited $7billion at inception, the government has borrowed $77billion within the past 4 years, making Nigeria to now owe $84billion.

For the past 30 years therefore, all that Nigeria borrowed was less than $77billion. But within 4 years, Nigeria has borrowed this sum.

Therefore the question no one is at ease to ask or answer is: “what did Buhari and APC do with this money” ?
And they are talking of another loan of $30billion; to increase it to $107billion.

In a tweet however, BudgIT Nigeria @BudgITng gave a note of caution:

“CAUTION: FG External Debt has grown from $7.34bn in June 2015 to $22.87bn as at June 2019, a 211% growth in 4years.

President@MBuhari submits a plan for another $30. The details are yet to be public.

7.41 AM Nov 29, 2019.

What is confusing to non economists however is, if BudgitIT is mentioning only the external borrowings while Dr. Mailafiya is adding domestic debts to the figure. Whichever way it goes before the figures are reconciled, one thing is certain: Nigeria is plunging deep into debt and the plans to get out of it are not yet clear with the current declining Crude oil revenues and rising national inflation levels.

Meanwhile, President Muhammadu Buhari had on Thursday, November 28, 2019, recounted how he was frustrated by the 8th session of the National Assembly over his plans to borrow money for some developmental projects to which he has re-forwarded the Federal Government’s 2016 – 2018 borrowing plan to the Senate for approval.

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Greg Abolo

Blogger at The Oasis Reporters.

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