‘Buhari’s $29.26b loan request is killer blow to economy’

Professor of Economics, Olabisi Onabanjo University (OOU), Ago-Iwoye, Ogun State, Prof. Sheriffdeen Tella, has described President Muhammadu Buhari’s request for $29.26 billion external loans as an attempt to deliver a killer blow to the economy.

He told The Guardian yesterday that the amount of borrowing in the past by the Buhari administration had not been justified, making it difficult to ascertain if the $29.26 billion loans, if passed, would also be used judiciously.

Tella, who asked the Senate to scrutinise the loans the current administration had taken since it came on board in 2015, said, “If the country was able to wade through 2016 to 2018 without such a huge loan, what makes it imperative that the country cannot survive now with a better prospect without the loan?

“It is, of course, not true that there was no borrowing within that period. The government floated bonds locally and in the international markets, including Sukuk, and these were over-subscribed. I recall that those borrowings were meant for infrastructural development.

“Has there been accountability on how those loans were used? If the loans were properly used, the current level of power supply across the country should not have been and the state of our roads has not justified the proper usage of the loans.”

According to him, over 20 per cent of the annual budget is used in servicing debt in a country that is public sector-dependent.

He added that most of the abandoned projects in the country could be financed through concession and public-private partnerships without pressure on the economy.

Calling on the Federal Government to heed the advice of the International Monetary Fund (IMF) and the World Bank, he said, “With the mounting level of corruption, lack of transparency and accountability in the usage of outstanding loans, the National Assembly should save the future generation of debt burden by turning it down again, else it could serve as a killer blow to the economy.

“The federal lawmakers should direct the government to look for alternative financing model.”