Nigeria: Buhari's Ministers to Reps - Why Nigeria Must Borrow $22.7bn Now

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(file photo).
11 December 2019

Abuja — For government to meet the infrastructure needs of the people, borrowing is inevitable, three cabinet ministers told the House of Representatives yesterday.

The ministers, including that of Finance, Mrs. Zainab Ahmed; Works and Housing, Babatunfe Fashola, and Minister of State for Transport, Gbemisola Saraki, made the submission at a session with the House of Representatives Committee on Aids, Loans and Debt Management, headed by Safana Dayyabu (APC, Kano).

Also with the ministers was the Director-General of the Debt Management Office, DMO, Patience Oniha.

Specifically, the ministers appeared before the committee to defend the loan request of $22.718 billion made by President Muhammadu Buhari to the Senate.

They reiterated the urgent need to fund the budget, improve on infrastructure development and create jobs with the loan.

Making her presentation, the Finance Minister, Zainab Ahmed said: "We need to invest on roads, rails, and to be able to grow at a rate better than we are growing now. They are strictly for infrastructure development, so we can address the deficit that we have. We know we must comply with some criteria."

Placing the borrowing figure at $22.718 billion, the minister said Nigeria had no debt sustainability problem but revenue challenge, adding that every Kobo borrowed would be judiciously utilised.

Also speaking, Minister of Works & Housing, Babatunde Fashola, said the government could not ignore the demands for infrastructure sustainability.

"It is right to have this hearing because we cannot ignore the concerns of members of the public, the debt profile of the country. As we cannot ignore the concerns about debts, so we cannot ignore the concerns and demands for the provision of life-sustaining infrastructure.

"So, everybody wants a road, everybody wants a rail project, everybody wants a port and efficient airports. They want to ensure that our ports are efficient so that business can function more effectively, so that clearing of goods can happen more quickly and cheaply.

"Where in the midst of these physical challenges that she (the Minister Finance, Budget and National Planning) has identified, the revenue are not just enough to meet these challenges."

Fashola said there were a total of 524 ongoing road projects across the country but noted that there was no money to execute them.

He said: "524 road projects are currently being executed; 73 billion released this year. We have contractors willing to do the work but we cannot pay them.

"We have had deficit budgets for a long time and so we have to borrow. Over four years, we have never received full funding for any budget. There is deficit and we cannot finance it. We must find a away to finance these assets. We will be spending today's money to secure tomorrow's assets".

Asked to speak on the current status of the East-West Road, the minister said it was not under his ministry.

But attempting the question, Fashola said a substantial part of the road had been completed.

"East-West Road's not under my ministry; it is under Niger Delta Ministry. I can say here that a substantial part of that road has been executed. I drove through the stretch in 2016. Large parts of it have been completed," he said.

On Benin-Auchi-Okene road, the minister said: "From the briefings from Ministry of Finance, there are external borrowings; there are also internal borrowings. The road is being funded under SUKKUK, which is local borrowing. The SUKKUK is not enough to fund all the roads. We got N100 billion, we share it across all the six zones."

Denying insinuations that Nigerian roads are not built up to the standard, Fashola said: "Nigerian roads are designed to global standards. We are not doing things as we want but according to global standards."

Minister of State for Transport, Gbemisola Sakari, also spoke on the need for the Federal Government to take foreign loans, and stressed the need to complete the Kano-Lagos and Niger Delta coast rails.

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