Foreign debt: Financial expert frowns at $7.8bn, €100m fresh loan request
.Wants FG to focus on production
A former President, Chartered Institute of Bankers of Nigeria (CIBN) , Mazi Okechukwu Unegbu has frowned at the recent request by the President Bola Tinubu for the Senate to approve a fresh $7.8 billion and €100 million loan for the country.
However, Nigeria’s foreign debt is expected to rise further to about $51 billion, when senate grants approval for the president’s request which is part of his 2022-2024 borrowing plan.
Mazi Unegbu, who took a cursory look at the present economic situation in country, maintained that this is not the best time for Nigeria to borrow, adding that Nigeria is currently in debt.
In a letter addressed to the Senate and read at plenary on Wednesday, by Senate President Godswill Akpabio, Tinubu explained that the request was anchored on an approval given by President Muhammadu Buhari-led administration, after a Federal Executive Council (FEC) meeting early in May 2023.
But Mazi Unegbu who spoke to Newsmen in a telephone interview, said that Nigeria is currently owing so much in terms of foreign and national debt.
“Honestly, we have borrowed so much. We borrow for consumption, supporting the naira, which is not the best. It doesn’t yield any result for the economy.
“If the funds were used for production, it will be for the benefit of the economy. Unfortunately, we have a Senate that does not analyse issues,” he said.
Mazi Unegbu however, noted that it is advisable to borrow for production,” but if it is for consumption, this is not the best time for us to borrow.
The President’s letter reads: “The Senate may wish to note that the past administration approved the 2022-2024 borrowing plan at the Federal Executive Council, which was held on the 15th day of May 2023.
“The projects cut across all sectors with specific emphasis on infrastructure, agriculture, health, education, water supply, security and employment as well as financial management reforms, among others.
“The facility of the projects and programmes under the borrowing plan is 7,864,508,559 dollars and then in Euro, 100 million euros respectively.
“The Senate is invited to note that following the removal of fuel subsidy and its impact on the economy in the country, African Development Bank, AfDB, and the World Bank Group, WBG, have indicated interest in assisting the country in mitigating the economic shores and recent reforms with a sum of $1 billion and $2 billion respectively, in addition to the Federal Executive Council approved 2022-2024 external borrowing plan.
“Consequently, the required approval is in the sum of 7,864,508,559 dollars and in terms of euros, 100 million euros.
“I would like to underscore the fact that the projects and programmes borrowing plans were selected based on positive technical economic evaluations as well as the expected contribution to the social economic development of the country, including employment generation, skills acquisitions, supporting the emergence of more entrepreneurs, poverty reduction and food security to improve the livelihood of an average Nigerian.
“The projects and programmes will be implemented in all the 36 states of the federation and the Federal Capital Territory.
“In view of the present economic realities facing the country, it has become imperative that the resolve to use external borrowing to breach the financing gap, which will be applied to key infrastructure projects including power, railway, and health, among others.
“Given the nature of these facilities and the need to consolidate the country to normalcy, it has become exigent to request the Senate’s consideration and approval of the 2022-2024 external borrowing plan to enable the government to deliver its responsibilities to Nigerians through expeditious disbursement and efficient projects implementation.”
