Borrowing by government is not a bad idea .But certain factors must form bases for borrowing.
I believe that any govt that intend to go borrowing should in black and white details what she intend to do with such loan.
Also, the same govt should detail how she is going to pay for such loan.
So there should not be any form of secrecy on public loan by the govt. Members of the public whom the people in govt are holding the govt for, should know everything concerning the loan, intending projects and repayment plans.
So, three factors must be covered in the loan process if we are ready to stop Loan diversion by those in the govt. They are:
(1) What do we need the loan for?
A govt that intend to go for borrowing should be open enough to let the public know what she intend to do with the loan and how much that is involve .This will help the public to monitor the loan utilization .
For the simple knowledge that the people knows that , example ; that N10million loan is for Block Industry project at town A, the govt will be forced to utilize such fund into what it was meant for , while the people also watch to see if the project worth #10million loan .
(2) What is our repayment plans?
Situation whereby a governor of a state will just go into borrowing from left and right without coming up with details of how to repay the loan without hampering the future development of the state remain our biggest headache.
Most times, governor that borrows money is different from the governor that faces the challenges of paying back.
This default background is one of the reasons why most governors go into borrowing without utilizing the loan for what it ought to be for.
Public loan should produce what to be used to repay the loan.
My view is that public borrowing should be for profit yielding infrastructures so that such infrastructure will generate and fund the repayment of the loan.
Borrowing for recurrent expenditure is crazy! Not just that borrowing should be for Capital Expenditure, but it must be for profit yielding infrastructure! This is the way to go!!
Borrow to build borehole that will not generate revenue for loan repayment for instant must be drop!
Such Public Policy Behaviour (PPB) is one of the problem facing Public Loan Utilization and Repayment Question in Nigeria.
Borrowing if one must go for it must be tie on a project that will pay for the loan!
If such project can’t be manage by the govt, they should go into partnership with private sector so that they harmonize the conflict between the profit and service delivering in order to produce equilibrium between all interested parties.
(3) Any project that can’t fund repayment of a loan must not enjoy the loan.
If we adopt this new thinking, we are going to save our generation and next to come.
We must change style on public policy dealings in order to produce new positive results. Burden of public/government loan in Nigerian economic development calls for new thinking. Continuing to behave the same way over and over again while hoping for new result, is crazy on our part.
We must engage our mental capacity and create new order in order to solve this ever problem of Public loan diversion and repayment crisis.
I see hope…
Ikechukwu Emeka Onyia is a public policy analyst based in Abuja, Nigeria; 08032496183, firstname.lastname@example.org