President Muhammadu Buhari has resubmitted for the second time, the $29.96bn 2016-2018 external borrowing plan to the Senate for approval, adding that the profits derived from oil production in Nigeria are inadequate for sustenance.
In the request letter read by the President of the Senate, Ahmad Lawan, Buhari asked the senate to renew his request for the $29.96bn loan which was rejected by the 8th senate, led by Bukola Saraki.
November 2018 was the first time Buhari requested the loan, it was thrown out by the Senate, who held that the letter following it, did not include a borrowing plan.
The letter read: “I hereby request the resolution of the Senate to approve the Federal Government’s 2016-2018 external borrowing plan, as well as relevant projects under this plan. Specifically, the Senate is invited to note that while I had sent the 2016-2018 external borrowing plan to the 8th National Assembly in September 2016, this plan was not approved in its entirety by the legislature”.
“Only the Federal Government’s emergency project for the northeast, four states’ projects, and one China Exim bank assisted railway modernisation project for the Lagos – Ibadan segment were approved out of a total of 39 projects.”
“The outstanding projects that were not approved by the legislature nevertheless are critical to the delivery of the government policies and programme relating to power, mining, roads, agriculture, health, water and the educational sector.”
Buhari said that the approval of the $29.96bn loan will speed up the completion of projects under the borrowing plan like infrastructure, agriculture, health, education, water supply, growth and employment generation, poverty reduction through social safety net programmes, governance and financial management reforms among others.
Reacting to Buhari’s request for a loan, the chairman of the Senate Committee on Local and Foreign Debt in the 8th National Assembly, Senator Shehu Sani. He said: “We turned down the Federal Government loan request of $29.96bn to save Nigeria from sinking into the dark gully of a perpetual debt trap.”
“If we had approved that loan request, our external debt could have catapulted to over $52bn and that is not sustainable. With the current escalation of borrowing, we will be walking into debt slavery and move from landlords to tenants in our own country”.
“They will always tell you that even America is borrowing and I don’t know how rational it is to keep on borrowing because another country is borrowing. If we keep listening to bankers and contractors, we will keep borrowing and burying ourselves and leave behind for our children a legacy of debt burden”.
“Loans are not charities. Most of those encouraging more borrowing, are parasitic consultants, commission agents, rent-seeking fronts and contractors.”
Should the Ahmed Lawan led senate grant the President his request? According to the Debt Management Office, Nigeria in its Q1 public data report owes N458.363 billion debt from both federal and state-level and N101.6 billion external debt. If Nigeria is in such debt, should the President of the country be requesting a loan as outrageous as $29.96bn?
Nigeria has the largest economy in Africa. It is ranked as the 27th-largest economy in the world in terms of nominal GDP, and the 22nd-largest in terms of purchasing power parity. Oil revenues make up 2/3 of state revenues, and 9% of the GDP. If oil is not yielding enough profit as the President said, isn’t it about time we invest the same level of energy into the agricultural sector?
Nigeria was once a large net explorer of food but fell short due to the inability to keep up with the growing population. If the government invests keenly in the small, medium and large-scale levels of agriculture, the economy will move by an upward trajectory.