Economic and financial experts have warned President Muhammadu Buhari to exercise caution over his administration’s plan to borrow $29.96bn from external sources.
Similarly, the opposition Peoples Democratic Party called on Nigerians to stop Buhari from borrowing the amount and moving N180bn appropriated for special intervention to fund critical recurrent and capital items.
It also asked the two chambers of the National Assembly not to approve the request by the President.
Buhari had on Tuesday asked the National Assembly to approve the external borrowing plan to enable his government to raise funds to execute key infrastructural projects across the country between now and 2018.
But experts said on Wednesday that the amount was too huge and that the Buhari-led administration needed to tell Nigerians the specific infrastructural projects in exact locations across the country that the money would be used to finance.
A professor of Economics at the Olabisi Onabanjo University, Ago Iwoye, Sheriffdeen Tella, described the external borrowing plan of the Federal Government as too bogus.
Tella also asked the government to give a detailed breakdown of the proposed projects the funds would be used for, and specific plan of how it intended to pay back.
He said, “The money is too huge. We need to know the breakdown of the projects it will be used for. If it is for project financing whereby it is tied to specific projects in certain parts of the country, then fine. We need to also specify how much will be borrowed each year over the next three years of the borrowing plan.
“To me, the money is too huge. We do not manage our debts properly. We need to specify the repayment plan and what is going to be our income over the next five years or more. We are not good managers of resources; we are going to run into serious problems with this. If all these details cannot be given, then the National Assembly should approve just $10bn from it. Already, we know that we can’t borrow to finance recurrent expenditure. ”
An economic analyst at Ernst & Young, Mr. Bisi Sanda, also said the government needed to carry out reforms of its financial management system before embarking on such a borrowing.
Otherwise, he said it would be tantamount to borrowing to finance the ostentatious living of some corrupt government officials.
Sanda said, “Borrowing, in principle, is not wrong. But if you are using it to finance the corruption or ostentatious lifestyle of public officials, then there is a problem. It has been said some time ago that Nigerians only get 45 per cent value from all government expenditure. This is unlike in the USA where the people get 100 per cent value. Read in full