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Explain repayment of N1.84tr loan, PDP tells Buhari

Olisa Metuh, National Publicity Secretary of the People's Democratic Party.

Olisa Metuh, National Publicity Secretary of the People’s Democratic Party.

FOR the People’s Democratic Party (PDP), the plan by President Muhammadu Buhari to borrow N1.84 trillion loan to fund the N6.08 trillion 2016 budget will aggravate the nation’s economic crisis instead of reducing it. The opposition party thus yesterday asked the Federal Government to explain to Nigerians how it intends repaying the loan.

In an interview in Abuja yesterday, the National Publicity Secretary of the party, Olisa Metuh, explained that a breakdown of the N1.84 trillion showed that Nigeria would be borrowing N5 billion daily for the next 365 days, starting from January 1, 2016, even as he lamented that there was no corresponding provision for economic production and a clear repayment plan, a scenario he noted that would spell doom for the nation in the future.

Metuh said: “Some people may be wondering why we raised the alarm about the budget. The reason is simple. When we analysed the budget, we discovered it is a misshapen attempt at Keynesian economics of applying deficit spending to stimulate growth even when studies have proven that Gross Domestic Product (GDP) growth rates decrease by over 50% when debt goes from low or moderate to high. But then we know the borrowing here is to pay a huge campaign debt and fund a political war chest.

‘‘By every standard, this budget is a booby trap against the nation.
When you break down the proposed N1.84 trillion borrowing, you discover that it amounts to borrowing N5 billion everyday for the 365 days in 2016. The questions are: For what specific projects are they borrowing N5 billion per day and how do they intend to pay back?’’

He continued: “The president should explain to Nigerians how they intend to pay back the loan. Is it by continuous borrowing to service the interests, and does he intend to accumulate colossal debt for future generations of Nigerians? The truth is that this administration cannot justify this proposal. There is no known economy in the world where you can justify borrowing N1.84 trillion without specific projects and precise repayment outline. This is worse still in an oil-driven, mono-economy at a time crude oil is selling at $30 dollars per barrel and is speculated to go down to about $20 dollars or even lower in the next one year. The idea can only come when you diversify the economy and boost production capacity in manufacturing and other critical sectors, a direction, which the budget clearly failed to provide.”

The PDP warned that Nigeria might be pushed to the level of Greece economically if urgent steps were not taken to reverse the trend.

“From all indicators, the borrowing will be negative. They are driving us to be like Greece, and to plunge us into an unnecessary debt. When the PDP took office in 1999, we achieved the cancellation of inherited debts. This administration, in seeking to accumulate debts, should know that there is no possibility that any country in the world will give us debt cancellation anymore. More importantly, we are really worried about negative economic policies of the present administration and the copying of strategies that failed in other economies.

‘‘Recall that we had earlier alerted to the negative consequences of the retrogressive foreign exchange controls wherein this government is making it impossible for honest Nigerians to engage in free trade and regulate their personal activities. There seems to be the erroneous belief that the controls will create foreign exchange stability or strengthen the naira by limiting foreign currency outflows. This policy had badly affected other countries in the recent past, including Argentina, whose new government had to reverse the policy to save their economy. Why then are we copying a policy that failed in other countries?

‘‘In practice, the kind of crude controls the Federal Government is implementing have been proven ineffective in preventing capital flight. By limiting the local availability of foreign exchange, the controls have instead increased the demand for foreign exchange, putting greater pressure on the naira and achieving the exact opposite of what the government in its naivety believed would happen.

‘‘The negative impacts of the ill-conceived controls include the hindering of international trade and discouraging of foreign investment.

We have seen first-hand the crippling of the private sector in the last six months, upon the implementation of these measures. Traders, importers and all manner of businesses are being destroyed as a result of the contrived unavailability of foreign exchange,” he said.

The PDP spokesman challenged the Federal Government to a public and open debate on the budget devoid of the sentiments of the All Progressives Congress (APC)-controlled National Assembly and who he claimed were mindful of any cuts in their own allocation.



9 Comments
  • Ify Onabu

    Buhari should explain to Nigerians how he intends to repay this looming trillion naira debt. Will he repay the debt before he leaves Aso Rock or is he going to pass on the debt burden to a successor? If he intends to pay, he has a responsibility to explain to Nigerians his repayment plan; if not, this budget is nothing but a scam. If he intends to pass on the debt burden to a succeeding administration, that is not a responsible thing to do. In Proverbs 13:22, it is written ‘a good man leaves an inheritance to his children’. Nigerians must understand that in a democracy, the ‘elected’ leaders are accountable to the people. Buhari cannot just wake up one morning and decide to plunge Nigeria into a vicious debt cycle.

  • Hibee..

    This Mr Metuh should go and sit down somewhere and stop giving people false information. @IFY. Don’t let this dude confuse you because there is no way in this world, Nigeria, my hood, my country can never experience what is happening in Greece because we have the resources. All we need is just to manage it very well.

    • Wise Head

      Who is going it “manage it well”? Buhari? Continue dreaming!

    • Concerned Nigerian

      Saying that there is something that cannot happen in Nigeria is not right…. what you do not want to happen, you prevent. There was a time that Nigeria was using more than fifty percent of her income to service debts.. and it could happen again.
      Debt in itself is not bad but when you do not use it to produce and you do have no good plan of paying back, you get into trouble.
      WE MUST ASK TOUGH QUESTIONS OF THE GOVERNMENT AND DEMAND ANSWERS OR ELSE WE WOULD ALL BE GUILTY OF SILENCE…. THE NATION MAY DIE IF WE KEEP SILENCE!!!

  • vic

    MR METUH, DO NOT ASK ANY QUESTIONS FROM DAURA DEADWOOD BUHARI RIGHT NOW, ASK HIM THIS QUESTION AFTER HE HAS LOOTED THE LOAN MONEY OF N1.84 TRILLION. AFTER ALL, YOUR CORRUPT MASTER, CLUELESS JONATHAN DID THE SAME IN A SLIGHTLY DIFFERENT WAY. WHAT IS THE DIFFERENCE?? AFTER ALL, YOU ARE ALL TREASURY LOOTERS IN ONE FORM OR THE OTHER.

    • Mazi JO

      Then, ‘Vic’, you will have to labor to correct the calculus of two wrongs making a right. Are you already sick of the change mantra? I presume not.

  • Tayo Akin

    For defunct PDP, there is no honour among thieves, we need positive criticism of Buhari’s government, but not from dead PDP, the most despicable party Nigeria has ever had to contend with in the history of governance. PDP is synonymous with stealing and looting with bold face. Good there is no more plea bargains, the thieves will all serve long terms in jail after recovery of stolen money.

    • Wise Head

      Calling PDP names does not invalidate the point being made that Buhari wants to sink this country with focuslessness, and no matter who you are, it will affect you. Any responsible Nigerian should not be talking about party here now, but the mindless mortgaging the future of this nation. How can any sane mind borrow N1.8 trillion to finance a one-year budget? I said it before that once this band of locusts seize power in Nigeria, they will sell it to the lowest bidder. Nigeria has really entered “once chance” with this directionless “changi” characters

    • Mazi JO

      “…we need positive criticisms…” how positive can one get by having a proposed debt have a planned repayment schedule? You are just PDP-rabid in projecting adversely a well worn caveat. Do not be deceived by partisanship. You are dealing with Government, people, politics and issues here. The earlier the transparency, the better administered the proposed policy. I think you are the one bent on silencing a Party with a deserved warning for the people even though they are in opposition. There has been a myriad of uncontrolled borrowings in the system where the Nation was left embroiled in drowning debts. PDP’s caution is in order. The Party is still a member of the Republic.

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