Stakeholders and some eminent Nigerians have reacted over the purported plans of the Federal Government to borrow additional N6.258 trillion loan to finance the 2022 budget.
But former President Olusegun Obasanjo had last month registered his displeasure over the continuous borrowing by the Federal Government. Obasanjo said the move to take fresh loans amid outcries by Nigerians over incessant borrowing by the current administration is uncalled for.
Speaking to Channels Television in South Africa, he said that it was criminal to accumulate debt for the next generation to pay.
Obasanjo expressed worries that if the existing debt remains unserviced or unpaid by President Muhammadu Buhari’s administration, it might become a huge problem for successive governments.
Other analysts who spoke to our correspondent on the phone warned that the current bid to accumulate more public debts would mortgage the future of the country and its future generations.
They were also worried that the current move is not being done in a transparent manner that would enable Nigerians to know the specific projects the loan would be tied to and the institutions the government intended to borrow from.
A financial analyst, Mr Abimbola Onipede, said it would be careless on the part of this government to be borrowing and building unsustainable debt burden for future generations and succeeding governments.
According to him, “We have repeatedly said that the government should cut its coat according to its cloth. It must look for where and how to reduce its over-bloated governance structure that has been consuming so much. And there are one thousand and one budget heads they can do away with without retrenching workers.
The Minister of Finance, Budget, and National Planning, Mrs. Zainab Ahmed, had on Wednesday, at the end of the weekly virtual Federal Executive Council (FEC) meeting, said the target to deliver many of the administration’s legacy projects would not be achievable without taking credit facilities, noting that the generated revenues are barely enough to meet recurrent expenditures.
According to her, the N6.258 trillion budget deficit in the proposed 2022 Appropriation Bill will be financed through local and external loans.
She said, though concerns are being raised over the frequent borrowings by the administration, she allayed fears that the situation might be spinning out of control already, noting that Nigeria’s borrowings are still within healthy and sustainable limits.
“If we just depend on the revenues that we get; even though our revenues have increased, the operational expenditure of government; including salaries and other overheads, is barely covered or swallowed up by the revenue.
“So, we need to borrow to be able to build these projects; that will ensure that we’re able to develop on a sustainable basis.
“Nigeria’s borrowing has been of great concern and has elicited a lot of discussions; but if you look at the total size of the borrowing; it is still within healthy and sustainable limits. As of July 2021, the total borrowing is 23percent of GDP.” Ahmed said.