Worried by President Muhammadu Buhari’s request for approval from the Senate for an $800 million World Bank loan to finance the National Social Safety Network Programme initiated by his administration, Nigerians have urged him to put a moratorium on borrowings till he leaves office.
This was as many advised the President to stop awarding further contracts, saying he has only 16 more days to stay in office and should therefore not give room for looting and diversion of public funds in the name of contract mobilisation funds.
Recall that the President had last Wednesday written to the Senate to seek approval for an $800 million loan to finance the National Social Safety Network Programme.
“Please note that the Federal Executive Council (FEC) approved an additional loan facility to the tune of USD800 million to be secured from the World Bank, for the National Social Safety Net Programme and the need to request for your consideration and approval to ensure early implementation.
“The Senate may wish to note that the programme is intended to expand coverage of shock responsive safety net support among the poor and vulnerable Nigerians. This will assist them in coping with the costs of meeting basic needs,” the letter read by the President of the Senate, Ahmad Lawan, to lawmakers on the floor of the Senate, read in part.
The FEC had also on the same day approved the award of N459 billion in contracts.
The Minister of Transportation, Mu’azu Sambo, who briefed journalists alongside his Water Resources counterpart, Sulaiman Adamu, at the end of the FEC meeting, had defended the decision, saying: “Ladies and gentlemen, without any intentions of mischief, this government was elected to function from 2019 to precisely May 29, 2023. Should we now stop functioning one month before the next appointment because we are coming to the end of the tenure?
“This government must work. We expect the next government to also work until the very last day of their tenure.”
Despite the Federal Government’s justifications for these moves, financial experts and public affairs analysts who spoke with The Guardian on the issues expressed anger at the decisions, saying such do not obtain in a sane society.
A financial analyst and Associate Professor of Economics at the Obafemi Awolowo University, Ile-Ife, Dr. Tunji Ogunyemi, said: “Were it to be in a sane clime, the government should have been impeached. Why do I say this? Only a few days ago, the National Assembly approved an amount equal to about N22 trillion of unbudgeted amount that the Federal Government spent by always causing the Central Bank of Nigeria (CBN) to grant it what it calls Ways and Means.
“Already, your budget is in deficit; you now ask the CBN to print money to the tune of 22 trillion. That’s an offence against the federation because it has been done without the approval of the National Economic Council, the National Assembly and the National Economic Consultative Forum. So, this government is culpable on criminal grounds. If it were to be a sane environment, the President after leaving office should be censured and punished for it. Buhari should put a moratorium on borrowings till he leaves office.”
Similarly, a public affairs analyst and lawyer, Abiodun Williams, noted that, “nothing should make Buhari borrow again until he leaves office.”
“He has about 16 days to go and as it is now, the Aso Rock is being renovated and the burden is now on Tinubu. So, there is nothing that should make Buhari borrow any further except he wants to leave room for final looting before he leaves,” he added.
Another public affairs analyst, Moses Obaditan, also said Buhari’s actions would have negative effects on the next administration, stressing that the nation’s debt burden has become worrisome.
“The day Buhari came into governance, our indebtedness was N12.12 trillion. But today, we are now at N69 trillion. It has already affected the economy and weakened the naira. We should blame the CBN and the Economic Adviser to the President. We have to blame the National Assembly for approving these loans.
“The effect this will have on the incoming administration is that it may make it go bankrupt, especially if the next president also adopts Buhari’s borrowing style. Already, the economy is crippling and that’s partly due to this debt,” he added.
Many residents of Yenagoa, the Bayelsa State capital, who spoke with The Guardian, also expressed their dissatisfaction with the Buhari administration’s penchant for burrowing, even as many infrastructures across the country remain derelict.
Wisdom Ikuli said every Nigerian has the right to query the intentions behind the last minute contracts the administration is awarding and the loans it wants to secure.
Ikuli, who is the National President of the Niger Delta Non-Violence Agitators Forum (NDNAF), lamented that ordinary Nigerians would feel the burden of the loan in years to come if the National Assembly goes ahead to approve it.
He said: “While Mr. Muhammadu Buhari as the President and Commander-in-Chief of the Armed Forces of the Federal Republic of Nigeria has right to sign all documents till May 29, 2023, when he will formally handover power to the incoming administration, Nigerians have every power to query the intentions behind the last minute contracts he is awarding and the loans he is securing.
“I can say without equivocation that despite the pretense about anti-corruption fights, a lot of things have gone wrong under his watch and much more is happening these last days of his exit from power.
“Unfortunately, it is ordinary Nigerians that are bearing the brunt of the failure in leadership that is worsened by high level of corruption.
“The negative implication is that the incoming administration shall grapple with the burden of those ill-conceived loans and Nigerians, especially the hoi-polloi, shall be the highest sufferers. I therefore disagree with the loan facility.”
Also speaking, an environmentalist and human rights activist, Comrade Alagoa Morris, said Buhari should by now be preoccupied with preparing his handover notes, not burrowing more money.
Alagoa, a former scribe of the Civil Liberty Organisation (CLO) and Bayelsa State of Environmental Right Action (ERA), stated that leaving a huge debt burden for the next administration was a minus for the outgoing administration and an undesirable phenomenon.
He said: “Ordinarily, an administration that has been in the saddle for two terms, that is winding up it eight years in Aso Rock, ought to have been preoccupied with perfecting its handover notes of assets and liabilities by crossing the ‘Ts’ and dotting the ‘Is’ and not embroiled in the sort of actions we are hearing or reading about.
“Due to similar actions observed in some states of the federation, I think the state and National Assembly should wake up in the common interest and ensure that the Executive doesn’t lead our states and nation into losses and debts, which would imprison the masses.
“Leaving a huge debt burden for the next administration is a minus for the outgoing administration and an undesirable phenomenon.
“Considering what the Jonathan administration left as foreign reserves, the level of depletion of Nigeria’s foreign reserves leaves much to be desired and it would be a herculean task for the incoming administration to bridge the lacuna. If care is not taken, Nigerians might be compelled into another phase of austerity measures.
“Except the contracts signed at this eleventh hour are so tight and necessary that they cannot be repudiated, the incoming administration would have the discretion to breach or allow them as agreed.
“I don’t have the details, otherwise I would have blamed the National Assembly for approving loans at this time. And the incoming administration can renegotiate whatever terms thereto.
“Huge burden, as so much funds that would otherwise be put into productive use, would be used to service debt. This will deny the nation in the area of economic growth.”
In his brief remark, a former Bayelsa State Chairman of CLO, Chief Nengi James, also advised the outgoing president to prepare his notes and leave to rest and not put the nation under another debt burden.
A development and financial expert in Enugu, Dr. Chiwuike Ubah, has also asked the Federal Government to jettison the idea of awarding new contracts and fresh loans since a new administration would be inaugurated in a few weeks.
Ubah stated that though it was still legitimate for the outgoing administration to continue to preside over the affairs of the country until May 28, undertaking fresh capital commitments would put the economy into further pressure.
He stated that already the country was sitting uncomfortably by the efforts to repay the loan secured with about 70 per cent of the Internally Generated Revenue (IGR), lamenting that the economic benefits of projects executed with secured loans were not factored before such loans were appropriated.
He added: “We all know that what they are doing is not that right. They are still in power and they will take decisions until May 28. But they should know that we are already struggling with our loan repayment and as you know it is taking almost 70 per cent of our revenue. It is not even as if our oil revenue is increasing; our oil revenue has continued to decline. So, it is not a wise economic decision to go for fresh loans.
“The implication of going for a fresh loan is that it will cause the economy more problems. The next thing that will happen is that the incoming government will introduce all manner of fiscal policies to see if they can shore up IGR, which means that there will be a lot of taxes and other things that will happen and this will add to the harsh business environment and create a lot of sufferings for the people.
“I am seeing a situation where they will remove subsidies on electricity tariff and gradually also remove the subsidy on fuel (if there is subsidy in the first place). When these things happen, we will have higher inflation in the economy. Most of the loans the government has taken were on the cover that you use it for infrastructural development but in most cases, almost 70 per cent of such loans ended up in cushioning operational costs and others. Nobody has done cost benefit analysis to know how the loan should apply so as to enable it repay itself over a period of time
“We have secured loans to rebuild the rail line such as the one going to Niger Republic without asking whether anybody will utilise the service to be able to raise such loans within the shortest period of time.
“What is the economic implication in such areas when the government would have made such investment in the South and all that and is able to recoup the money at the shortest period of time? So most times, the loans are used to fund recurrent expenses when it has the cover of capital expenditure and this is the challenge. So let them jettison it for the new government.”
The Civil Society Legislative Advocacy Centre (CISLAC) has also expressed concern over the last minute multi-billion contract awards by the outgoing Buhari administration.
The centre noted that while there is nothing wrong in awarding contracts if such contracts are aimed at improving the welfare of the citizens, it is however clear that going by the records, the last minute contract awards was just another scheme to allow some individuals enrich themselves at the expense of ordinary Nigerians.
CISLAC warned that the decision of President Buhari would definitely affect the next administration especially as this is an overlap and overburden of responsibility, noting that the implications is that the next administration would struggle to pay off the debt.
It noted that Nigerians should not forget that the incoming administration would also borrow in the name of development projects.
Executive Director of CISLAC, Auwal Musa Rafsanjani, who stated this in a chat with The Guardian in Abuja, observed that the decision of the President to award the contracts at this critical moment in time and take more loans were lame and uncalled for.
He said: “The President awarding contracts of billions/trillions of naira in his last minutes points to the fact that there are really many things to worry about by all relevant stakeholders. While there is nothing wrong in awarding contracts if such contracts are aimed at improving welfare of the citizens, it is bluntly clear that going by the records, this is just another scheme to allow some individuals enrich themselves at the expense of ordinary Nigerians. ”
“The big question is: Why would the President award such contracts when he is fully aware of the economic situation of the country? More worrying is how this administration borrowed money in the name of development but the monies allegedly ended up in the pockets of some government officials and some politicians, and yet the President sought the approval to borrow 800 million dollars in just some few weeks before handing over power. This is just ridiculous.
“Our position is that there is nothing wrong in borrowing money for development; all countries borrow money to develop themselves. But our concern is that when our government borrows, it should channel these monies into building infrastructures and facilities that will facilitate repayment as a return on investments not official looting and diversion.”
Rafsanjani lamented that the current administration would leave a huge economic burden on taxpayers who happen to be ordinary people that don’t so much benefit from the borrowing.
“The damage done to the Nigerian economy by the Buhari-led administration has done more harm to the country than expected. The level of impunity and flagrant disregard for citizens’ welfare explains this glaring fact looking at how unemployment, corruption and insecurity are still on the rise. Over the years, what we have witnessed in this administration is nothing more than the government’s unwillingness to focus its attention on reviving the economy, securing the lives and properties of Nigerians. It is unfortunate to state that what is most prevalent in this administration is more corruption, impunity and injustice at local, state and federal levels perpetuated by some public officials,” he added.
According to him, the Nigerian economy and population would continue to suffer the consequences of these decisions.
“There is a huge economic burden on Nigeria, which unfortunately will be suffered by ordinary citizens. The elites don’t have a problem because they amass wealth for themselves at the expense of the citizens. We will witness a serious economic upheaval if sound policies and effective implementation are not put in place to curb the excesses of economic corruption and financial recklessness.
“From all indications, most of these last minute, hurried contract allocations will likely be reviewed because the priorities of the outgoing government may not be the same with the incoming administration. So, many of these contracts are likely to be cancelled or abandoned thereby wasting taxpayers’ money. We identified the fact that there must be a sound economic management team that will steer how these monies are spent so that we don’t go and leave debt burdens that will eventually be repaid by our future generations,” he said.
Rafsanjani argued that if the outgoing government really wanted to execute meaningful projects, they should have awarded the contracts years back knowing how long contracts duration takes to complete.
“This last minute contract award is very suspicious and dubious as it creates opportunities for looting and diversion of public funds in the name of contract mobilisation funds,” he added.
On the plan by the administration to borrow $800 million to finance the National Social Safety Network Programme, Rafsanjani said: “This unreasonable borrowing will have serious consequences on our overall productivity, which will reflect on the economy of course. But we advocate that improved productivity, services and prudent management of our resources are required to revive this unfortunate trend that might erupt because of bad policies of the government. Above all, the most important thing is for the government to use all means to provide an enabling environment for businesses and investments to thrive because this will facilitate more revenue generation that will then allow us to pay the debts while also allowing the citizens to enjoy the dividends of democracy.”
However, the President, Centre for Social Legal Studies, Prof. Yemi Akinseye George (SAN), noted that the loan being sought by President Buhari would have no negative effect on the economy when viewed from all ramifications.
George (SAN) told The Guardian in Asaba that the loan would not impact negatively on the economy but would rather prepare ground for the incoming government, since the government said the loan would be disbursed to vulnerable Nigerians to cushion the effects of the impending fuel subsidy removal.
“The loan seems appropriate for me, but the loan may be time bound. It is to soften and prepare ground for the next government. The fact that we borrow means we are credit worthy, which is even a sign to other countries and the World Bank that we have capacity to pay,” he added.
He, however, advised the outgoing administration to carry the incoming government along in respect to everything it would do with the money toward the growth of the nation.
A Port Harcourt based financial analyst, Mr. Ignatius Chukwu, noted that since by law the tenure of the present administration ends on May 28, the president could still sign contracts and take loans.
He explained that government is different from administration, adding that there is no change in government but change of administration.
He added: “The question is whether the contracts and funds are in the 2023 budget, which is a piece of law. The budget was done in 2022.
“In Rivers State, the governor has signed new contracts and signed bonds of up to 18 months that the Internally Generated Revenue (IGR) will be deducted to pay. That amounts to spending 18 months after your tenure, but the citizens seem comfortable. So it’s okay. The 10,000 workers employed will be paid by the next administration, not this one. It’s okay to the people.”
According to him, no matter when contracts are signed, citizens cry foul and suspect the government because of the level of corruption in the system.
“Morally speaking, the administration should have acted before elections because of suspicion but the next administration has the right to review any contract if found fraudulent.”
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