.Laments steady sink into debt crisis after Obasanjo pulled nation out of debts
.As Senate approves N1.767trn President’s loan request
.We’ll continue to prioritise social investment programmes, Tinubu tells IMF boss
Ignatius Okorocha, Abuja with agency reports
The presidential candidate of the Peoples Democratic Party, PDP in 2023, Alhaji Atiku Abubakar has described the borrowing by the Federal Government as bone-crushing, saying it brings Nigerian economy to insufferable pressure.
The former Vice President who condemned the latest borrowing in a statement he personally signed on Thursday noted that the National Assembly has become an accomplice.
According to him, “The recent report released by the World Bank, showing Nigeria as the third most indebted country to the International Development Association (IDA), is very concerning.
“This report is coming just when the government has already sent a proposal to the National Assembly signalling an intention to borrow an additional N1.7tn being shortfall in the 2024 budget through Euro Bonds.
“What makes this particular loan proposal even more concerning is that it is benchmarked at the exchange rate of 1 USD to N800, whereas the current exchange rate from the Central Bank of Nigeria stands at over N1,600 to 1 USD.”
He therefore added, “Nigeria is sinking further in debt, and the National Assembly has become an accomplice once more. Tinubu had, in July this year, boasted that the FIRS and Customs under his watch have collected all-time high revenues to finance the Budget. Why then are they still borrowing? There is something that they are not telling Nigerians, even as they are being crushed by a combination of their failed trial-and-error policies and loan rackets.
“These Tinubu’s loans are bone-crushing to Nigerians and bringing insufferable pressure on the economy, especially when they are not properly negotiated and utilized.
“It is concerning that the voracious appetite for these humongous loans is powered by corruption and not for infrastructure and development needs. A report by Budgit, a budget watchdog, has disclosed that the 2024 Budget is a mess because of the level of pork associated with it.
“I feel a sense of personal agony seeing that just a few years after the administration of President Obasanjo took our country out of foreign indebtedness, we are today back at the top spot in the same conundrum.”.
.As Senate approves N1.767trn President’s loan request
However, Barely forty Eight hours after receipt of request from President Bola Tinubu for $2.209billion , equivalent to N1.767trillion loan , the Senate on Thursday, approved the loan .
President Tinubu had on Tuesday this week in separate letters to both chambers of the National Assembly , requested for approval of N1.767trillion loan for part funding of N9.7trillion deficit in the N28.7trillion 2024 budget .
Recall that the Senate upon receipt of the request , mandated its committee on Local and foreign debts to expeditiously work on it and report back within 24 hours .
Accordingly , the Chairman of the committe , Senator Aliyu Wammako ( APC Sokoto North ) , during plenary, presented reports on the presidential request for approval.
Senator Wammako in the report , titled ” Implementation of New External Borrowing of N1, 767, 610, 321, 779.00 equivalent to $ 2.209billion in the 2024 Appropriation Act through the issuance of Eurobonds and other sources , said the presidential request was very necessary for approval .
According to him, the requested loan , is planned for execution of ongoing projects and programmed in the 2024 Appropriation Act which are critical for growth and development.
” It will contribute to the implementation of the Debt Management Strategy which seeks to reduce the cost of borrowing , lengthen the maturity of the public debt stock , free – up space in the domestic market for other borrowers and help increase Nigeria’s External Reserves .”, he explained .
He added that Nigeria could raise all or part of the New External Borrowing of $2.21billion through the issuance of Eurobonds in the International Capital Market ( ICM) .
That the issuance is for the part – financing of budget deficit.
The Committee as presented by Senator Wammako recommended thus : ” That the Senate do approve the implementation of the New External Borrowing of One Trillion, Seven Hundred and SixtySeven Billion, Six Hundred and Ten Million, Three Hundred Twenty-One Thousand, Seven Hundred and Seventy-Nine Naira (41,767, 610,321,779.00) (equivalent of USD2,209,512,902.22b) at the Budget Exchange rate of USD1.00/800 in the 2024 Appropriation Act and that the amount should be raised from one or more sources.
” Namely; issuance of Eurobonds in the ICM, Issuance of debut sovereign Sukuk in the ICM, & Bridge/ syndicated loans, subject to market conditions.
“Based on availability and cost, to issue Eurobonds in the sum of USD1.70 billion or more, but not more than USD2,209,512,902,.22b, approved as New External Borrowing in the 2024 Act.
“Given the significant increase in the official exchange rate from USD1.00/800 to approximately 41,640, it is recommended that the exchange rate excess resulting from this adjustment be exclusively utilized for implementation of capital projects in 2024.
“This will ensure that additional funds are directed to infrastructure & developmental projects that will contribute to the Nation’s long term growth and stability”.
The Senate after presentation of the report , expeditiously approved it at the committee of supply without any dissenting voice .
In his remarks after the approval , the Deputy President of the Senate , Senator Jibrin Barau who presided over the session, commended the Wammako led committee for a job well done .
The deputy President of the Senate, there and then announced suspension of other items in the Order Paper for a 30 minutes break to conclude legislative work on the passage of the approval of the external borrowing by documenting the work on approval through Votes and Proceedings.
This last function of the Parliament brings its action on a Bill or report to an end before it is transmitted to the President for his endorsement.
.We’ll continue to prioritise social investment programmes, Tinubu tells IMF boss
Meanwhile, President Bola Tinubu has assured that his administration will continue prioritising the welfare of the poor and most vulnerable even as the economic reforms bear fruit.
President Tinubu stated this on Wednesday night in Rio de Janeiro, Brazil, when the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, paid him a courtesy call on the sidelines of the G20 Leaders’ Summit.
While acknowledging that the reforms had weakened Nigerians’ purchasing power, President Tinubu said his administration will continue to provide social safety nets to cushion the unintended consequences.
Congratulating the IMF Chief on her election for a second term in office, President Tinubu appreciated her support in implementing the reforms, calling for more institutional backing for stability and sustainable growth.
“We have started seeing positive results from our reforms, and the Nigerian people now understand the need for them, but we have to reduce the hardship that has resulted from the implementation.
He emphasised the critical need for educational access.
“We have too many children out of school, and we know that education is a way out of hunger and poverty. That is why we are designing ways and incentives to keep these children in school, and we need your support for these kids who want to stay in school,” he told the IMF chief.
President Tinubu stressed that substantial resources must be invested to stimulate the much-needed infrastructural development in the country.
The President further noted that Nigeria is working on tax reforms to stimulate the economy further.
“We are engaging stakeholders and sensitising Nigerians to expand the economy’s tax base for inclusive developmental growth. We are doing this without necessarily increasing the taxes on our people who have already given a lot. We will require your support on this.”
In her remarks, the Managing Director, who expressed a desire to visit Nigeria, commended the Tinubu administration’s economic reforms and their positive indicators.
She assured the President of further support in diversifying the Nigerian economy.
She specifically lauded the social investment programmes as a way of cushioning the effects on the most vulnerable and promised the assistance of the body in this regard.
Contrary to popular perception, she said that the IMF is focused on developing vulnerable societies and devoting substantial resources to emerging economies.
The managing director expressed the Fund’s readiness to offer technical support for the budgeting process, adding that it will assist Nigeria in achieving the best possible results from loans.
Georgieva said the world had suffered some shocks from the pandemic that caused damage to world economies. Over the last two years, the IMF has injected about $1 trillion into the world economy.
While the developed countries managed the shocks better, the developing nations did not do so, she noted.
She said the IMF is working with developing countries to build resilient institutions to better manage future global economic shocks.
She stressed that it is the right of every country to benefit from the Fund after a critical analysis of its priorities.
The IMF Managing Director informed President Tinubu that the organisation’s Executive Board has approved the 3rd Chair for Sub-Sahara Africa (SSA), enhancing the African voice.
She congratulated Nigeria on hosting the IMF’s African Caucus meeting in Abuja in August.
Georgieva also advocated for deepening regional economic ties, ensuring the IMF is ready to support this process.
