•Says mounting debts worrisome
By Merit Ibe
President Muhammadu Buhari’s request yesterday for the Senate’s approval of an $800 million loan request from World Bank to finance his National Social Safety Network Programme (NSSP), has drawn the ire of Nigeria’s Organised Private Sector (OPS) which described the move as a strange proposition.
Director, Centre for the Promotion of Private Enterprises (CPPE), Dr Muda Yusuf, in his view on the request believes that any conversation or engagement on subsidy removal and palliatives are better left for the incoming administration, adding that the country has had such subsidy related palliatives in the past and none involved borrowing.
He said the practice had been that palliatives were funded from the savings from subsidy removal, which makes the current proposition rather strange.
“Besides, there are policy dimensions to the delivery of palliatives. Government needs to explore fiscal and monetary policy options to incentivise investment in sectors that could mitigate the pains of subsidy removal. These include investment in refineries, pipelines, petrochemicals, petroleum products marketing, fertiliser plants, food production and processing etc. There should also be incentives to facilitate investment in power sector, use of auto gas, etc
For his part, Chairman, Manufacturers Association of Nigeria (MAN), Apapa branch, Frank Onyebu, said it was shocking to say the least for the government to seek further loans to fund social programs.
“One would expect that what the government should be doing right now is preparing for hand over.
“I do not understand why we should be talking about fresh appropriations at this point in time. Assuming the Senate approves this new loan and I won’t be surprised if that happens going by antecedents of this senate, who is going to implement it? This administration or the next?
Onyebu queried the Federal Government rationale for fresh borrowing to fund social programs and not production related ventures, saying it really beats ones imagination.
“I don’t even want to go into allegations of impropriety in previous social programs. It just doesn’t make sense to borrow to fund such programs. Do they realise the need to repay these debts? How do they intend to repay such debts?
“Normally you borrow to fund productive activities.
Earlier yesterday at the Induction of Members elect of the National Assembly organised by the National Assembly and the National Institute of Legislative and Democratic Studies, the Director General of the Budget Office, Mr Ben Akabueze raised the alarm over the nation’s huge debt, which he said had become unsustainable. He lamented the Federal Government’s lack of an organic budget law that failed to trigger the alarm when the debt service of the country hit 30 per cent.
“Once a country’s debt service ratio exceeds 30 percent, that country is in trouble and we are already pushing toward 100 percent and that tells you how much trouble we are in.”
The expectation is that the funded activities would yield some dividends from which repayment can be made.
Unfortunately nobody appears to be interested in how these mounting debts are going to be paid. I’m afraid that we are already at the point where it is practically impossible for us to repay our debts which has accumulated to over N77 trillion. It’s going to take some miracle to get us out of the crisis we are already in. I don’t think we should be compounding our situation by getting into more debts, especially for non-productive activities.