An Open Letter to President Buhari and NASS on $4B, €710 loan

 My Opinion

An Open Letter to President Buhari and NASS on $4B, €710 loan

 President Buhari write NASS to request approval to borrow another $4B, €710m loan has created several uproar in the Nation,

According to the letter, the borrowing is an addendum to 2018-2020 borrowing plan and that his administration needs to borrow more funds to meet "emerging needs of some critical projects". The projects listed in the external borrowing plans are to be financed through the sovereign loans from the World Bank, French Development Agency, Exim Bank and IFAD.

This request comes barely two months after the National Assembly approved his earlier request to borrow $8.3B and £400M loans

Karl Marx made us to understand that "Class Conflict" is apparent in a society where ruling class keeps riding the less affluent.

Upon return to Democratic rule in 1999, at the tail end of President Obasanjo administration, He ensured he reached a deal to pay off the accumulated debts alongside 16 other countries in 2006.

As at now,

The debt profile is 33tr and the President seek another 2tr, which according to details accrued on Debt Management office website,

That means total debt under the Muhhamadu Buhari lead administration since 2015 excluding the recent request is #20.8tr and servicing gulps #10.26tr.

His administration keep justifying the request on using it to build infrastructure in the Nation.

However,

The more a Country borrows, the poorer the citizens become, A country keep downgrading in the economical sphere is she chooses loan borrowing as a way of remaining solvent. It is a stimulation of transfer payment that discourages the citizens from working.

An economy should rather face a natural decline to discover its own potentials. Singapore, China, Japan are a few examples of Countries that have gone through such and have risen from it.

Borrowing external loans admist decline in the Nation currency against the USD, GBP, EURO and other major currencies while inflation rate are in double digits, food prices have doubled, that's not good, and this ha more impact more than the exchange rates of the Naira to other foreign currencies.

Whereas the Government need to secure the nature , reduce the overbearing cost in doing business, the business environment can equally be hostile, over taxed and over regulated in some cases. 

In as much as we need to build infrastructure,

We also need to apply the conventional wisdom of WHEN YOU ARE IN A HOLE you stop digging.

We need to the economic team to come up with a well detailed plan other than borrowing at every point, we need to look inward and create enabling environment to attract investors and empower SMEs to start producing to sustain local consumption.

The President and NASS needs to be reminded that loans are not grants, hence they are repayable,

With dwindling prices of Oil and output cut options OPEC usually adopts alongside many countries reducing usage of oil, how solvent will the Nation be when we have accumulated so much loans in the name of building infrastructure ? Repaying loans should go beyond building road with borrowed funds with no alternative route and the only repayments plan is toll gates, As a Nation, we have perchant for allowing public edifice to rot away due to lack of proper maintenance or not putting it to proper use, the list is almost endless and almost all states of the federation have a fair share of such.

At a time like this, what the Nation should look into is Public Private Partnership ( PPP ) for several infrastructural development, create an enabling environment, invite investors to bid, regulate the process under law and ensure all agreements and standards expected are carried out. We won't just have companies jostling to bid, but we will get quality infrastructure that will be properly maintained.