Amidst scathing criticisms trailing Nigeria’s rising debt profile, the federal government Monday explained it was borrowing “sensibly and responsibly” because the borrowed fund would be expended on proceeds-yielding infrastructure.
Available data from the country’s Debt Management Office (DMO) reveals a debt profile of N33.107 trillion as at March 2021, a development that has consistently come under criticism from some stakeholders.
Contrary to the position of the critics, Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed explained that the loans were targeted at critical infrastructure that would generate employment.
She spoke at a media parley in Abuja.
At the briefing were Minister of Information and Culture Lai Mohammed, Minister of Budget and National Planning Clem Agba and the newly appointed Statistician-General, Dr Simon Harry.
The media briefing was to provide some insights into the recent development around the nation’s Gross Domestic Product (GDP) which grew by 5.0% (year-on-year) as announced by the National Bureau of Statistics (NBS) for Q2 2021.
Asked whether government’s continued borrowing would not impact negatively on the economic growth recorded so far, the minister said the loans were targeted at critical infrastructure that would on their own yield proceeds for the country.
“We are borrowing sensibly and responsibly to invest on critical infrastructures. These investments will make returns in future,” the News Agency of Nigeria quoted the minister as saying.
Speaking further, Hajiya Ahmed said: “We are borrowing with a very close consideration to the sustainability of the borrowing. The borrowing level for Nigeria today is still 23 percent of the GDP.
“I have said it several times that the problem we have in Nigeria is that of revenue, and when you look at the country that are within the peer group with Nigeria, there are some that had 50 per cent growth that are now at about 70 per cent growth.
“We are at 53 despite the escalated borrowing we had to deal with in 2020; also in 2021, to get a good grip on the economic situation that was occasioned by COVID-19 pandemic and in our case, due to the crash in crude oil price.
“We are borrowing sensibly; we are also borrowing to invest in critical infrastructure like power, water, roads and rails which are investments that are required to enhance business productivity in the country today.
“These businesses will grow, they will not only pay taxes, they will also employ people. If we don’t do this, we will regress even from where we are today. It is a necessary investment so we are borrowing responsibly.
“We are making sure what we are borrowing is applying to major infrastructure that will return revenue in the near future.”
On the 2021 budget deficit, the minister said: “We have an approval in the 2021 budget to fund the budget deficit 50 per cent locally and 50 per cent externally. The 50 per cent external borrowing is 6.1 billion Euros; we are planning to use about half of that from Eurobonds and the other half using other windows such as multilateral and bilateral sources.”
Security slows down GDP
The minister further said the nation’s GDP would have posted more impressive performance but for the increasing security challenge.
Drawing some level of comparison, the minister said: “The 2021 second-quarter growth reflects better economic performance compared to the same quarter last year. The same quarter last year we had negative growth of -6.10 per cent. It is also better than the first quarter of 2021,” Mrs. Ahmed told journalists at a press briefing where she reviewed the latest results from the NBS.
“The service sector recorded a strong performance, growing by 9.27 per cent this reporting quarter – representing the fastest growth in this sector since 2010.
“The second-quarter growth of 2021 would have been much stronger than the 5.01 percent, but for agriculture, that recorded a slightly lower growth. A number of bottlenecks within the system, including insecurity, negatively affected the sector. Also, the industrial sector slowed down to -1.3 percent.”
CAN assures on economy
Also speaking on the nation’s economy, President Christian Association of Nigeria (CAN), Dr Supo Ayokunle assured that the nation’s economy would bounce back in no distant time.
Dr Ayokunle stated this Sunday evening while speaking at the flag-off of the eight-day 39th Annual Holy Ghost Convention of the Sword of the Spirit Ministries Ibadan themed; ‘Abundant Rain,’ held at the PCU campus, Garden of Victory, Ibadan, Oyo state capital.
He said the Lord would fight the “beast of bandits, of Boko Haram, religious terrorists, kidnappers, and other criminals operating in Nigeria and cause them to be wiped away”
Ayokunle also said “violence will become a thing of the past in Nigeria, and all Nigerians, from the youngest to the oldest, shall dwell in safety in Jesus name.”
“I prophesy into you Nigeria and Nigerians that our economy is going to bounce back and Nigeria will flourish, Nigerians will flourish and people in the Diaspora will rush back home and possess their possessions. Nigerians, henceforth, you will not be fugitives anywhere, anymore”, he said.
The CAN leader further stated that “the name Nigeria shall be respected everywhere. The lost glory shall be restored in full. Nigeria is not going to become Afghanistan; no Taliban is going to take over here. We tear every false prophecy apart, concerning Nigeria in Jesus name, Amen.
“I stand in the place of Ezekiel and I prophesy to Nigeria and Nigerians that there shall henceforth be showers of rain upon you. And the showers will bring freshness to the body. Let there be peace in Nigeria. The Lord will fight the beast of bandits, of Boko Haram, religious terrorists, kidnappers, and other criminals operating in Nigeria and caused them to be wiped away in Jesus name.”
Also in his remarks, President Pentecostal Fellowship of Nigeria (PFN) Bishop Wale Oke noted that corruption, insecurity and economic hardship had taken their toll on the existence of Nigeria and its people.
Quoting from the Book of 1kings 18:1, Oke, who is the presiding Bishop of The Sword of the Spirit Ministries Ibadan, said “this is the situation of Nigeria presently. There’s drought because of iniquity in the land. But when rain comes, it takes care of the negative. It ushers in the positive; the weather is cold, the grass is green and there’s fruitfulness. The positive begins to break forth, leading to the abundance of everything that’s good.”
The PFN leader then prayed for an end to the problems currently affecting the nation, saying; ” we terminate corruption in Nigeria, we terminate Boko Haram insurgents; we terminate kidnapping and all manner of crimes in the land. There shall be peace in Nigeria.”
