Sun, 25 Feb 2024

 

Nigeria Economic Crisis: Further loans will sink Nigeria – Analysts
 
By: Cletus Sunday Ilobanafor
Sun, 11 Feb 2024   ||   Nigeria,
 

 Dr. Bolaji O. Akinyemi, Convener of The Apos­tolic Roundtable (ART), has faulted advice to the Federal Government to borrow more loans to stabilize the econ­omy.
Dr Akinyemi lamented Pres­ident Bola Tinubu’s appoint­ment of almost 30 media aides, which he declared the largest in the world by any government in human history, saying President Tinubu deserved a Guinness World Record for it.
He pointed out that the con­sequences of the excess baggage was that there probably would be Public Relation Officers hired secretly to set agenda for govern­ment policies and decision for soft landing in the public, argu­ing that there was otherwise no rational in the call for more loans.
Recall that Ayodeji Adelagun, Managing Director/Head, Finan­cial Market Nigeria & Rates & Credit West Africa, at Standard Chartered Bank recent unveiling of 2024 Global Market Outlook, argued that for Nigeria to have a stable economy it would need to borrow at least N21trillion more.
Dr. Akinyemi asked: “Is it about the funding budget deficit? Or what is the context for such an expert’s opinion informing this unsolicited advice to the govern­ment to borrow? To fund what specifically?
“A government so burdened with indebtedness that the great­er part of our crude in the next five years is dedicated to paying loans!”
Akinyemi said as far as he was concerned, the use of the word ‘bankruptcy’ was aimed at nudging the Bola Ahmed Tinubu administration to just borrow for the sake of it, or to satisfy some sense of prebendal indulgences.
He stressed: “The concept of ‘Agbado Economy’ is simple. Stay away from borrowing, plant all your resources and potentials as seeds, in other words, invest and nurture till harvest.
“Of course, we will need to endure the pains of waiting for the harvest. But it will come and when it does, we shall be better for it.
“In the meantime, FGN expen­diture switching is all that may be required to plug any funding gap in governmental administration for now.
“For me, the burden of addi­tional loans on a country already cracking under the weight of debt is a No! No!! No!!!
“Not with the brilliant idea of ‘Agbado Economy’ which those in government have refused to even allow us to present to them.”
Chief Emeka Charles Kalu, a seasoned politician and politician and Peoples Democratic Party (PDP) chieftain, maintained that as things stand now, the Federal Government does not need to further drag the economy back­ward by venturing to borrow a whopping sum of 21 Trillion for whatever reason “misguidedly cited by the initiators.”
Dr. Kalu, an engineer and President, Eck Foundation, stressed: “It is the lack of a well-defined economic policy and its implementation that retards the general progress expectations and the government is directly re­sponsible for this failure.
“To further seek loans from external financial bodies would not help Nigeria overcome the prevailing economic challenges, rather the government needs to cut cost of spending in gover­nance.
“The 2024 Appropriation Bill was N27 trillion and stepping up the nation’s debt height, if care is not taken, could lead to a total economic breakdown with re­sultant risks of plunging us into surviving through protracted dependence on global monetary interventions.”
Kalu noted that during the Muhammadu Buhari regime, a chunk of $3.4billion was bor­rowed from the International Monetary Fund (IMF) with no proper accountability of how the funds were spent.
He stressed that these funds, according to reports from the desk of the Auditor-General of the Federation, disappeared in the same regime under whose signature it was borrowed.
Kalu added: “The government is advised to provide a clearly defined roadmap for the socio-political and economic transfor­mation of Nigeria rather than opting for taking another huge loan capable of finally sinking the economy.
“When the government hast­ily removed fuel subsidies with­out having robust master plans of mitigating its likely effects on the citizens, vulnerability risks were seen to have been in­creased.
“The injection of $100million by the government to cushion the effects of the said sudden regime changes was not enough considering our large population and the level of excruciating pains already being felt by the masses.”
Kalu, an aspirant for the Abia North Senatorial seat said: “I condemn in totality the govern­ment’s quest to further take loans without considering the nation’s high debt profile. It is corrup­tion and lack of accountability that weaken Nigeria’s brighter opportunities of advancing eco­nomically.
“Insincerity hardly allows the human mind to excel and it is ap­plicable to what is obtainable in Nigeria government where the actors have failed to be sincere in their dealings with the functions of governance.
“We would not be expecting the ‘jackpot’ financial miracles to happen when those in govern­ment are busy looting the public treasuries.
“Sovereign Wealth Funds, Ecological Management Funds, Social Intervention Funds, CBN, NNPC Ltd, NIMASA, Customs and other relevant agencies should not only be given close monitoring on their operations, but should also be reformed in such a manner that accountabil­ity would not be further compro­mised .
“This way, Nigeria could be fairly saved from militating eco­nomic bottlenecks.”
Barrister Emeka Iheonu, a Lagos lawyer, in his response, stated: “I do not believe that bor­rowing more in 2024 will prevent bankruptcy in Nigeria.
“It will rather worsen Nige­ria’s poverty level and inflation. The government will not be able to save for the future as it will keep on using a chunk of its rev­enue in servicing debts.
“Furthermore, most of the borrowed funds will end up be­ing misused, misappropriated and looted as experiences have shown.
“Rather than borrow, the gov­ernment should curb all avenues used by public officials and pol­iticians in engaging in corrupt practices.
“The government should be sincere to the masses and give ac­count of its financial activities at every point in time. Legislators should function on a part time basis.
“Constituency allowances to legislators and security votes to governors should be stopped forthwith.
“Frivolous foreign trips and foreign trips for medical reasons by public officials and politicians should be banned.
“There should be a policy in place whereby public and elected officials should purchase Nige­rian made goods for official use such as vehicles, furniture, etc.”
Prof John Ebhomien, a finan­cial expert, and World Bank/IMF expert said: “The expert opinion that Nigeria needs to borrow an additional N21trillion in 2024 to avert bankruptcy is misplaced.
“However, following a critical sensitivity analysis of the econo­my, it would be suicidal to borrow such huge sum.
“What we need at this chal­lenging period is sound mone­tary and fiscal discipline, with probity and accountability at levels of governance.
“The CBN and the Monetary Policy Committee (MPC) must ensure price stability, low infla­tion; block all financial leakages in the system.
“The CBN must take urgent steps to ensure transparency in the banking industry. They must also take urgent steps to stabilise the exchange rates.”

 

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