Independence: Nigeria celebrating generational debt @ 61 – Former ADP Publicity Secretary

Former National Publicity Secretary of the Action Democratic Party (ADP), Prince Adelaja Adeoye has carpetted President Muhammadu Buhari for leading Nigeria into a generational debt trap, saying that rather than spending tax payers fund to organize 61st Independent celebration, the country should be on a sober reflection.

Adelaja, who was recently appointed into PDP’s national convention organizing committee (NCOC), said it is not a bad thing to borrow, saying that the strongest economies of the world like US, China and England also borrows but for strategic national development sake.

In Nigeria, most of the borrowed funds end up in the pockets of the powerful, through one means or the other, which leaves the country to be fully exposed to her lenders.

Adelaja said when President Obadanjo came to power in 1999, one of his efforts was to get our huge loans, which was accumulated by the Military regimes forgiven, and he achieved that.

The country started on a clean note again after 1999, but it is so worrisome that between that time and now, Nigeria is now in debt to the tune of N33.107 trillion, “which is not reflective in our national development, be it human or instrastructural development.”

The report from Debt Management Office noted that, Nigeria’s Public Debt Stock as at March 31, 2021 which comprises the Debt Stock of the Federal Government of Nigeria (FGN), thirty-six (36) States Governments and the Federal Capital Territory (FCT) stood at N33.107 trillion or USD87.239 billion.

The Debt Stock also includes Promissory Notes in the sum of N940.220 billion issued to settle the inherited arrears of the FGN to State Governments, Oil Marketing Companies, Exporters and Local Contractors compared to the Total Public Debt Stock of N32.916 trillion as at December 31, 2020, the increase in the Debt Stock was marginal at 0.58%.

Worrisomely, when President Buhari came to power, he told the entire world that he met an empty treasury, but shortly after, some States were given what they termed as bail out funds. Nigerians also witnessed that when an election is closer in some APC controlled states, a bail out grant of N20 billion was also extended to them.

When you compare the debt stock before and after President Buhari ascend to power, you would realize that something is fundamentally wrong in the way this current government is accumulating debts and what they are being used for.

“The question that is begging for an answer is, why taking more loans when source of repayment is nosediving, because this is like setting up the next and coming government, which would be spending most of its time grabbling on how to repay these loans.

“Recently, the President transmitted a fresh loan request, to the National Assembly seeking for a legislative approval of $4.179 billion ($4.054 billion and $125 million) and £710 million”, this will add to the existing N33.105 trillion debt stock of the country.

“Currently, the country’s debt service to revenue ratio is standing at 98%, which is not healthy for the country.

“What this means is that a time is coming that Nigeria won’t be able to fund its annual budget by even a percent if care is not taken. These factors affect the economy badly as we can all see that Naira to a dollar is about N580 now.

“Putting all these together, it appears that the government seems not to be listening to experts opinion on this accumulation of loan drives, because Chairman of President Muhammadu Buhari’s Economic Advisory Council (EAC), Dr. Doyin Salami, has also raised an alarm saying that debt service-to-revenue ratio is at 97.7 per cent (January to May 2021), and that the country’s public debt profile was unmaintainable.

“The mainstay of our economy is oil, which is gradually giving way to newer technologies like electric vehicles, renewable energies, solar power and others. The main source of repayment for these loans is now getting alternatives, and instead of dipping more, we need to stop and reflect on our current and future financially.

“What is Nigeria celebrating at 61?”, Adelaja asked.

On VAT controversy, he urged that States be allowed to compete in the collection so that there would use it in payment of workers’ salaries and development of infrastructure instead of going to Abuja to share free money.

In doing that, Adelaja argued, the quest to contest governorship election would decline, saying that anybody who is not competent will be be exposed.

He said: “The current system where money realized from one state is shared with another State, who did not lift a finger or work for it, will continue to aid underdevelopment. What most of the governors practically do in office was to wait for monthly FAAC from Abuja and after then call it a day till next payment. The country must begin to practice true federalism if at all we want real progress, Adelaja concluded.