Estimated reading time: 11 minute(s)
There is nothing wrong in taking more loans to finance specific projects, the Presidency said on Sunday.
It urged those criticising efforts in borrowing to develop the country, to desist.
Presidential spokesman Femi Adesina said Nigeria has more capacity to accommodate loans.
He spoke while featuring on Southwest Political Circuit, a popular political interview programme on Ibadan-based radio station, Fresh F.M.
Adesina called from his Aso Rock office to take questions on aspects of COVID-19 management and economic issues.
He said that there was no need for Nigerians to raise concern about the country’s rising debt profile because the President Muhammadu Buhari administration is applying loans to the specific projects they are meant for.
Although he pointed out that the huge debt, which the country is owing, was largely borrowed by previous administrations, he stressed that current figures were within the capacity of the country’s Gross Domestic Products (GDP) to service and repay.
Adesina said: “Don’t forget that the International Monetary Fund (IMF) came out to say that Nigeria’s economy has the capacity to absorb more loans and that Nigeria is taking below what its GDP can afford. IMF said it and it is on record. Nigeria’s GDP can service more loans than it is taking. That is a vote of confidence in Nigeria’s ability to repay the loans it is taking.
“Taking loans to use for development is not a crime. But taking loans to steal and pocket as we used to have it in this count; ry is what is criminal. You will find out that even the profile of the loans, Nigerians don’t know it.
“Even former president Olusegun Obasanjo gave a lecture where he quoted a figure about what Nigeria owes. The Debt Management Office (DMO) had to come out to correct him. I think he quoted something in the region of $90b or $100b debt.
The DMO office came to say all that this administration has taken is a little over $20b. The DMO also told us what the Peoples Democratic Party (PDP) government left as loans and debt. So, a lot of commentators don’t know the correct profile.
“The loans will be used for development, for provision of infrastructure, open up and stimulate the economy. These loans are good because they are used for development and that is what this administration is doing. The loans are within tolerable limit.
“So, those who are making noise about loans, particularly the outgone government, are only shedding crocodile’s tears because under them, they took loans and pocketed the money and we didn’t see what they did with the loans. But Nigeria is now taking loans and Nigerians can see what the government is doing with the loans.”
He said the government could borrow more money to revive the economy from the consequences of COVID-19 if it considered it appropriate.
He assured that the Buhari administration was already considering all possibilities in its efforts to mitigate the effects of the pandemic.
With strong economies reeling from the effects of COVID-19, Buhari’s media adviser explained that the Federal Government would carefully apply strategies that would effectively restore the fortunes of the country post-COVID-19.
While responding to the allegation that the Federal Government was supporting farmers in the North to the detriment of their southern counterparts, he said such allegation was coming “from a mindset that is one of the banes of Nigeria.”
He said: “There is what is called LAKE rice, which is a collaboration between Lagos and Kebbi states. Is Lagos in the North? No. Rice is grown massively in Ogun State and is Ogun State in the North? No.
“Every state has the right to access the Anchor Borrowers programme of the Central Bank of Nigeria (CBN). But the CBN has standards and principles and guidelines. Any state that meets the guideline can get the money.
“Maybe states that are not benefitting for now are not ready to pay their counterpart funds or are not ready to organise farmers into cooperatives. That will not be the fault of the Federal Government. The funds are available for every part of the country.
“Anybody who says the Federal Government is supporting the North against the South on this programme is operating from a mindset that is one of the banes of Nigeria.”