The government of Muhammadu Buhari has borrowed at least N10 trillion in less than two years.
Last week, Nigerians were told that President Buhari has given approval for the Ministry of Transport to negotiate a $15 billion loan for Port-Harcourt-Maiduguri rail line.
The government had borrowed in excess of N2 trillion to finance the 2016 and 2017 budgets and will also borrow N2 trillion to finance the 2018 budget.
That is aside the foreign loans procured to build the Calabar-Lagos coaster line rail, the Lagos-Ibadan rail project, the SUKUK, among others.
Taiwo Adisa wrote:
With debts, debts and more debts all over the place, you want to wonder whether Nigerians of the future will found the huge debt inheritance funny at all.
You want to wonder if the government had devoted half the energy being expended on seeking foreign loans to diversify the economy the economy or to propel private funding and concessions, whether the economy would not be better for all. God forbid oil prices crashing to all time low.
Two weeks ago, someone noted on his Facebook account that the fact that all the bonds floated by the Federal Government were oversubscribed is a good indication that onshore and offshore private sector money is out there seeking to invest in Nigeria.
It is a pity that the likes of Finance Minister, Kemi Adeosun, Transport Minister, Rotimi Amaechi and the three-in-one Minister Babatunde Raji Fashola cannot smell that opportunity.
Before the change of power 2015, two key projects were placed on the Public, Private, Partnership (PPP) arrangement. You had the Lagos-Ibadan Expressway and the Second Niger Bridge. The then government flagged off the two projects with public funds and had expected that before the budgetary provisions would be exhausted, the private sector funds would have matured and taken over.
The idea was that the private sector people would easily come together, raise consortium that would seek to reap the benefit of managing such a lucrative roads like the Lagos Ibadan Expresses way and the Second Niger Bridge. The advantage in that is easily a win-win option. Government would not be saddled with unusual debt burden, while the federal bureaucracy would also not be tempted with managing the huge funds needed to execute such projects.
With the change of government, the logic changed. Minister of Power, Works and Housing, Babatunde Raji Fashola wrote series of letters after the passage 2016 budget, in attempt to justify his complaint about the reduction of funds allocated to the Lagos-Ibadan Expressway.
He claimed that National Assembly members cut the funds allocated to the project to support their constituency projects. I held then that the Minister misplaced the facts. The lawmakers cut the allocation to that project in view of the thinking that the original PPP plan for the project subsisted.
Right now, it is clear that the Federal Government has sent the PPP idea into the dustbins. It is clear that new helmsmen prefer direct public funding for the monumental projects to evolving the PPP initiative. But the same government knows of the existence of the public funded Infrastructure Concessioning and Regulatory Commission (ICRC), which expectedly should advise on such issues.
In the thinking of the current incumbent government, infrastructure projects are better done with public finances. And with the national budget already condemned to deficit financing, infrastructure funds are to come largely from foreign loans.
With that thinking, the Buhari government has borrowed at least N10 trillion in less than two years.