According to accusations made by former vice president Atiku Abubakar, corruption, rather than infrastructure and development needs, is driving the loans that the President Bola Tinubu administration has taken out.
Tinubu requested approval of a fresh foreign borrowing plan in the 2024 Budget (Appropriation Act) worth N1.767 trillion ($2.209 billion) in a letter to the National Assembly on Tuesday.
However, Tinubu’s request was accepted by the National Assembly less than 48 hours later, despite the concerns expressed by experts and civil society.
Should the loan be authorized, it will be used to partially fund the N9.7 trillion budget deficit for 2024.
This loan plan, according to Atiku, a former presidential candidate for the Peoples Democratic Party (PDP), is especially worrisome because it is benchmarked at the exchange rate of 1 USD to N800, but the Central Bank of Nigeria’s current exchange rate is more than N1,600 to 1 USD.
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The National Assembly has once again turned into an accomplice, Atiku stated in a statement, presumably alluding to its approval of loan requests during the most recent Muhammadu Buhari administration, even as Nigeria continues to spiral into debt.
The Nigerian Bureau of Statistics (NBS) reports that the country’s public debt stock, which includes both domestic and foreign debt, increased by 75.27% on a quarter-over-quarter basis from N49.85 trillion (US$108.30 billion) in Q1 2023 to N87.38 trillion (US$113.42 billion) in Q2 2023.
In addition, NBS stated that “in Q2 2023, total external debt was N33.25 trillion (US$43.16 billion), while total domestic debt was N54.13 trillion (US$70.26 billion).”
However, the World Bank’s recent report, which ranked Nigeria as the third most indebted nation to the International Development Association (IDA), is quite alarming, Atiku said.
The release of this report coincides with the government’s proposal to the National Assembly to borrow an additional N1.7 trillion to cover the 2024 budget deficit through Euro Bonds.
This specific loan proposal is even more worrisome because it is benchmarked at the currency rate of N800 to $1 USD, but the Central Bank of Nigeria’s actual exchange rate is more than N1,600 to $1 USD.
Nigeria’s national assembly has once again turned into an accomplice in the country’s growing debt. To finance the budget, Tinubu boasted in July of this year that the FIRS and Customs under his control had achieved record-breaking revenue collections. So why are they still taking out loans? Nigerians are being crushed by a mixture of their lending rackets and failed trial-and-error policies, but they are not telling them one thing.
“Nigerians are suffering greatly from these Tinubu loans, which are also putting unbearable strain on the economy, particularly when they are not properly negotiated and utilized.”
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The fact that corruption is driving this enormous desire for loans rather than infrastructure and development needs is worrisome. The 2024 budget is a shambles due to the amount of pork involved, according to a research by budget watchdog Budgit.
“I am personally distressed to find that, only a few years after President Obasanjo’s administration helped our nation escape its foreign debt, we are now at the forefront of the same dilemma.
“We need to exercise greater prudence and apply math to the loan frenzy,” he declared.
