Chuks Okocha in Abuja
Former Vice President and presidential candidate of the Peoples Democratic Party (PDP) in the general election, Alhaji Atiku Abubakar, has said Nigeria had taken almost as much foreign debt in the last three years as it had taken in 30 years before 2015 combined.
Atiku, who described the current debt situation as frightening, stated that it is not just because of the amount, but because of such unprecedented borrowing.
The former vice president in his verified tweeter handle said: “We have emerged as the world headquarters for extreme poverty and the global capital for out-of-school children. It begs the question: ‘what were the funds used for?’
Quoting the former United States President, John Quincy Adams, who once said: ‘There are two ways to conquer and enslave a nation. One is by the sword, the other is by debt,” Atiku said: “He may have very well been referring to Nigeria of the last three years.”
The PDP presidential candidate in the last general election said the business of government is too serious to be left in the hands of politicians, explaining that: “We must all ask questions because if they throw away the future, it is not going to be their future they are throwing away, it will be all our futures.”
According to the former vice president, the fact that Nigeria currently budgets more money for debt servicing (N2.7 trillion) than it does on capital expenditure (N2.4 trillion) is already an indicator that Nigeria has borrowed more money than it can afford to borrow. “And the thing is that debt servicing is not debt repayment. Debt servicing just means that Nigeria is paying the barest minimum allowable by its creditors,” he said.
He said while spending 50 percent of the current revenue on debt servicing, “this administration wants to take further loans of $29.6 billion! To say that this is irresponsible is itself an understatement.”
Atiku said: “As a businessman, one of the very first things I learnt is that you do not take loans except you are expanding your business. Even as an individual, when your income cannot fund your lifestyle, you are challenged to grow your income, not your borrowings.
“Even if this administration borrows $1 trillion, it will never be enough because their challenge is one of capacity. They are not using the funds they already have wisely. They do not need more debt. They need more intellectual capacity.”
He said the money the Buhari administration wants to borrow to fund its Medium Term Expenditure Framework (MTEF) could be acquired without sinking the country into further debt as all it requires is visionary leadership and business acumen.
According to Atiku, “In my economic blueprint, I said rather than turn in regular losses, which it has consistently been doing, the best thing to do with the Nigerian National Petroleum Corporation (NNPC) is to reform it.
“Of course, the administration paid propagandists went into overdrive, accusing me of planning to sell the NNPC to my friends. But just last week, Saudi Arabia’s ARAMCO, the most profitable company in the world, took that route and almost broke the global stock market with the most successful initial IPOs in world history, bar none. Ironically, Saudi ARAMCO raised $29.4 billion via this IPO. Just the amount this administration wants to borrow.” Such could have been Nigeria’s story, but for its failure of leadership.
“By reforming the NNPC, Nigeria can raise the $29.6 billion the Buhari regime wants to borrow, and we will raise the money without going into debt.”
He said if the Buhari administration had taken that route, not only would Nigeria have attracted Foreign Direct Investment (FDI) into Nigeria, it would have attracted confidence into the economy, and also shows that Nigeria has a thinking leadership.
“Take the example of the Nigeria Liquefied Natural Gas (NLNG) company. This is a joint venture between the Nigeria Government and the private sector. Yet, while the NLNG declares very handsome profits in billions of dollars every year, the NNPC declares loses! This is a proof that the NLNG model works, and the NNPC model does not,” he stated.
Atiku said Moody, the world’s preeminent rating agency, had just downgraded Nigeria. Ghana, a nation with only 15 percent of the population of Nigeria, now attracts more Foreign Direct Investment (FDI) than Nigeria, and Rwanda, a country with less than 15 percent of Nigeria’s mineral endowment, has an economy that is growing at twice the rate of Nigeria’s economy.
Accordingly, the former vice president said the problem is not revenue and the challenge is not Nigerians, explaining that the issue is leadership.
He explained that while there is scant information in the Medium Term Expenditure Framework for what the loan would be used for, he could not help but read a communication from the presidency to the effect that one of such projects would be the digitalisation of the Nigerian Television Authority (NTA) and other similar projects.