News Analysis

Reducing the Nation’s Foreign Debt

In April this year, President Muhammadu Buhari sought the approval of eight hundred and fifty billion dollars facility, to be sourced from domestic markets to fund critical Capital Projects in the 2020 budget.

Last month, the President also sought approval for an additional over five billion dollars loan to finance the 2020 budget shortfall and some critical projects.

These include over three billion dollars facility from the International Monetary Fund, IMF, over one billion dollars from the World Bank, five hundred million dollars from African Development Bank, AFDB for Covid-19 and one hundred and thirteen million dollars from Islamic Development Bank.

Towards the end of last year, the government sought over twenty-two billion dollars in foreign loans under its borrowing plans.

As a result of this, debt servicing has increased from two point four trillion naira in the 2019 budget, to two point nine trillion naira in the 2020 revised budget.

The advent of Covid-19 pandemic with its effect on putting virtually everything in a standstill and the fall in crude oil prices ,there is no doubt that the country will need to brace up to withstand these challenges.

This is a country whose budgets, aside from the huge shortfall mechanisms is hampered by debt service, and near collapse of critical infrastructure of the economy.

Government will have to put tough policies in place in the months ahead to bring about economic rejuvenation.

Successive administrations had paid little attention to address the unjustifiable wastes in the government circles and the public service in general.

It is necessary for government to focus on realistic steps to take to convince Nigerians of the administration’s understanding of the challenges the country is going through.

For instance, the Nigerian parliamentarians are believed to be the highest paid in the world, which is one of the issues government needs to beam its searchlight on.

It is commendable that the government wants to implement the Orosanye’s report on the reform of the public service several years after the government published its white paper.

At this critical point in time, it will be a case of a misplaced priority if the over nine billion naira, voted for in the 2020 budget for the rehabilitation of the National Assembly complex is used on the project.

The government should march their words of reducing wastes in governance with words and action as a country that spends more than half of its earnings to service debts and less on capital expenditure, will have little left in terms of development.

Fawzeeyah Kasheem

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