AHEAD of the weekly Federal Executive Council meeting which holds Wednesdays, the public occasionally learns of the key issues to be discussed. An issue considered pressing was the Federal Government?s intention to borrow N251 billion to finance deficits in the infrastructure budget.
The nation exited the debt trap in 2005 after series of lengthy negotiations that ended in a debt buy-back deal for the country, an effort for which Dr. Okonjo-Iweala, who was also Finance Minister at the time under President Obasanjo received accolades at home and abroad.
It is curious that the nation is incubating another debt trap so soon under the watch of the same person, a situation which has led to outcries and warnings from persons and institutions.
Governor of the Central Bank, Mallam Sanusi Lamido Sanusi, last year in London warned that, ?We are borrowing more money today at a higher interest rate while leaving the heavy debt burden for our children and grandchildren?. ?He advised the Federal Government not to allow ?present and unborn generations inherit the heavy burden of foreign debt since Nigeria is currently in big danger because of it.?
Similarly, Director-General of the Debt Management Office, DMO, Dr. Abraham Nwankwo has warned that the nation?s debt profile may hit $25 billion (about N3.75 trillion) by 2015.
According to the DMO, on its website, domestic debt stands at more than N6 trillion, while foreign debt at the end of 2012 was more than $6.5 billion.
A socio-cultural group, Afenifere Renewal Group, also said, ?It is ironic that the same Minister of Finance, Dr. Ngozi Okonjo-Iweala, who negotiated debt forgiveness for Nigeria eight years ago, is also the same person spearheading Nigeria?s re-entry into another foreign debt trap.?
Key to funding infrastructure is raising funds locally, especially through prudent management of local resources. Nigeria does not need to borrow abroad to finance development projects.
If we curtail avenues of waste, reduce the size of government, plug loopholes in the revenue chain, remove ghost workers from the payroll, and combat corruption, there would be funds to finance infrastructure.
The times call for better assessment of projects. The current culture of wastes sticks to a pattern. Contracts are awarded for projects that contribute little to the development of the country, such that even if there are funds for them, they are wasted in the layers of bureaucracies that dot the national landscape and that are deliberately introduced to consume the national budget than use it in developing the country.
Another debt trap, as projected by the DMO, will not be in anybody?s interest. It is worse when there are no guarantees that borrowed money would be used for specified projects.
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Source: http://www.vanguardngr.com/2013/03/nigerias-impending-debt-trap/
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