Labour, trade and employers’ unions have expressed concerns over the amount of debt accumulated by Nigeria in the past few years.
This is even as the World Bank recently approved Nigeria’s loan request of $2.2bn.
The Director General, Nigeria Employers’ Consultative Association, Dr Timothy Olawale, worried over the loan, especially in the light of the fact that the new addition would take Nigeria’s total loan commitment, both foreign and domestic, to over $80bn.
He said it was not only worrying but alarming, noting that the growing debt stock with huge percentage of the budgets, over the last decade, going to debt servicing, needed to be stopped.
The borrowing, he said, was understandable, given the state of the economy, but not to the humungous level it had turned out to be.
He stated that incurring debt for developmental purposes was not questionable, but that the over N25tn debt stock, taking over 20 per cent of annual national budget to service, should be enough source of worry.
Olawale said with the recent efforts at recovering looted funds, it was expected that the government would have an alternative source of funding to meet its developmental objectives.
He said, “We recall the Executive Order 7 of 2019 on the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme.
“The main objective of the scheme is to accelerate road infrastructure development for balanced economic growth in Nigeria by granting approval to private sector entities to construct and refurbish eligible roads across the country in exchange for tax credits, which could then be applied against Company Income Tax payable.
“Thus, the motivation for the scheme derives from the desire to take advantage of private sector funding and discipline to enhance road infrastructure development in the country.
“The scheme has a life span of 10 years reckoning from the commencement of EO7. We are aware that the private sector is already involved in the scheme and the government should allow or encourage more private sector participation.”
On his part, the Trade Union Congress President, Quadri Olaleye, said loans were not bad if they were judiciously utilised.
He added that the United States of America and some other big countries were equally owing, saying that the difference between Nigeria and these countries was that they used their loans to better their society, while in Nigeria, the loans were either looted or used to pay bogus salaries, allowances and buy luxury cars for politicians.
He expressed shock that at a time when life had become meaningless for most Nigerians, lawmakers were debating on preferred official cars.
Olaleye said that the present government had added considerably to the nation’s debt.
He said, “In fact, it has returned us to where we were 14 years ago. Our debt now exceeds $85bn. Reports have shown that Nigeria’s debt is about where it was in 2005-06, before we benefited from massive debt relief under President Obasanjo. To return to where we were in just 14 years without any significant economic progress is a huge disappointment.
Olaleye said the situation was more serious because of Nigeria’s status as a mono-product country, adding that once there was change in oil prices, the country would be impacted.
Speaking in the same vein, the President of the Association of Senior Staff of Banks, Insurance and Financial Institutions, Oyinkan Olasanoye, observed that loans were not the issue, but what they were spent on and how.
She pointed out that without increase in productivity, majority of Nigerians would remain poor.
She said, “We need to accelerate economic growth, and the best infrastructure to improve this is electricity.
Olasanoye said borrowing for recurrent expenditures was not worth it.