The opposition Peoples Democratic Party (PDP) has said the increasing foreign loans being acquired by the ruling All Progressives Congress (APC) is capable of plunging the nation into bankruptcy.
To the party that ruled the country for the first 16 years after the nation returned to democratic rule in 1999, there is nothing to show for the huge sum the current All Progressives Congress (APC)-led administration has borrowed since assumption of office in 2015.
According to National Bureau of Statistics (NBS), Nigeria’s total public debt portfolio as at December 31, 2020, stood at N32.92 trillion.
It disclosed this in its Nigerian Domestic and Foreign Debt report for Quarter Four, 2020, obtained from its website.
The debt profile was however, for the states and the federal government, N12.71 trillion or 38.60 per cent of the debt was external, while N20.21 trillion or 61.40 per cent of the debt was domestic.
“Further disaggregation of Nigeria’s foreign debt showed that 17.93 billion dollars of the debt was multilateral, 4.06 billion dollars was bilateral from the African Development Bank, Exim Bank of China, Japan International Cooperation Agency, India and KFW.
“Meanwhile, 11.17 billion dollars was commercial which are Eurobonds and Diaspora Bonds and 186.70 million dollars as Promissory notes.”
The Debt Management Office (DMO) had in March placed Nigeria’s public debt at N32.915 trillion.
In a statement, DMO stated that the debt as at December 31, 2020 included the debt stock of the federal and state governments as well as the Federal Capital Territory (FCT).
It had pointed out that after Nigeria exited from recession in 2017, the level of new borrowings at the federal level in the Annual Appropriation Acts had been reducing due to measures to ensure moderate rate of growth in the Public Debt Stock for debt sustainability.
“New borrowing to part finance budget deficits had declined steadily from N2.36tr in 2017 to N2.01tr in 2018, N1.61tr in 2019 and N1.59tr in the first 2020 Appropriation Act.”
It noted that apart from the new domestic borrowing of N2.3tr, the other new borrowings were concessional loans from the IMF, $3.34 billion, and other multilateral and bilateral lenders.
“Total Public Debt to Gross Domestic Product as at December 31, 2020 was 21.61 per cent, which is within Nigeria’s new limit of 40 per cent.”
According to the annual Nigeria’s External Debt Stock of 2020, 53.78% of the country’s debt is owed to multilateral organisations; debt from bilateral was at 12.17%, commercial debt was 33.49% and promissory notes formed 0.56% of the debt profile.
A breakdown of the debt showed that multilateral organisations like the International Monetary Fund (IMF) is owed 3,535.23, International Development Association 11,123.04, International Bank for Reconstruction and Development. 409.74.
African Development Bank is owed 1,600.53, Africa Growing Together Fund 0.17 African Development Fund 949.34; Arab Bank for Economic Development in Africa 5.88; European Development Fund 54.83; Islamic Development Bank 30.08 and the International Fund for Agricultural Development 224.80 culminating to a total of 17,933.64.
Bilateral debt sees Nigeria owing China (Exim Bank of China) 3,264.16; France (Agence Francaise Development) 493.71; Japan (Japan International Cooperation Agency) 80.20; India (Exim Bank of India) 37.00 and Germany (Kreditanstalt Fur Wiederaufbua) 184.32, making a total of 4,059.39.
Commercial debt from Eurobonds is 10,868.35 and Diaspora Bond 300.00, with a total of 11,168.35, Promissory Notes stood at 186.70 with a grand total of 33,348.08.
It was against this backdrop that the PDP Governors Forum on Monday in Uyo, Akwa Ibom State, condemned the rising debt profile of the country, saying over 80 per cent of the budget was being spent on serving debts.
The forum in a communique issued after its meeting and read by its Chairman and Governor of Sokoto State, Aminu Tambuwal, alleged that the ruling party has rubbished the gains made by the country when the PDP held sway in government.
“The communiqué reads in part, “The PDP frowns at the rising and seemingly uncontrollable debt profile of Nigeria with over 80 per cent of normal Appropriation spent on debt servicing.
“All the gains of the PDP government under Chief Olusegun Obasanjo, where Nigeria exited its foreign debt obligations have been destroyed. Borrowing for the NTA (Nigeria Television Authority) is scandalous. Money should only be borrowed for productive purposes as Nigeria current debt of over N36tn is becoming clearly unsustainable relatives to our earnings and GDP.
“We should not saddle the incoming generation with undue debt burden. The borrowing spree of the APC administration, if unchecked, will certainly lead Nigeria to avoidable bankruptcy
“A situation where the CBN creates money, decides how much of it will spend, on what to spend it without any form of control or supervision, is patently subversive of our constitutional order.”
Recall that the party, late last year kicked against Buhari’s plan to borrow additional $1.2 billion loan from Brazil saying debts owed China and other foreign countries was already a huge burden.
In a statement issued then, the PDP warned the loan would weaken the investment capacity and worsen the food security challenge.
It urged Nigerians to note that with the $1.2 billion (N459 billion) Brazilian loan, in addition to the N5.20 trillion borrowing already proposed in the 2021 budget, the nation’s “debt burden will hit a disastrous N36.2 trillion which will plunge our economy into a devastating pitfall”.
“The PDP, therefore, urges the National Assembly to save the nation by being circumspect in handling the loan request in the national interest.
“Instead of this recourse to reckless borrowings, the PDP urges the Buhari Presidency to apply itself productively by looking inwards and finding ways to harness and create wealth with the resources abounding in our country.
“What Nigeria needs now is for government to be more innovative and resourceful in galvanizing a productive economy instead of reducing our nation to a beggar status among the comity of nations,” the party said.
Meanwhile, the APC has justified borrowings by the Federal Government, noting that the loans were invested in the development of critical infrastructure across the country.
APC Caretaker Committee Secretary Senator James Akpanudoedehe said in a statement that the loans were judiciously utilised, instead of ending up in private pockets, which he claimed was reminiscent of when the PDP was in power.
He described the PDP’s outcry as a feature of a sinking platform struggling to clutch on any available straw to remain afloat.
He said the main opposition party was rattled by the gale of defections that hit the platform.
Akpanudoehehe said: “The sinking PDP is panicking due to its dwindling fortunes as the All Progressives Congress (APC) registered members hit over 40 million, with PDP members, including governors leaving the party in droves and joining the APC”.
In the same vein, a group within the ruling party, APC-Legacy Awareness Campaign (APC-LAC) has also maintained that the loans obtained by the federal government under the APC leadership are being judiciously used.
The group in a statement released to newsmen Tuesday in Abuja, and signed by the APC national youths leader, Ismaeel Ahmed, director general of the Progressive Governors Forum (PGF) Salihu Lukman and the former APC national publicity Secretary mallam Lanre Issa-Onilu noted that Nigeria Air Force (NAF) has acquired about 23 new aircraft since 2015 as part of the commitments of present administration to end insecurity.
It added that these are part of efforts by the APC-led government “is confronting Nigeria’s longstanding and deep-rooted security challenges.”
It also cited the launch of the Nigeria Police Trust Fund, the new Police Act signed by President Buhari in 2020 which incorporates the concept of Community Policing to buttress President Buhari’s determination to secure the country.
It also added that none of Nigeria’s security challenges is new, stating that what is new is the boldness and commitment with which the Buhari Administration is confronting these age-old challenges.
“Even as several challenges persist across the country, we are confident that the interventions being implemented, many of which have not been seen in Nigeria’s recent history, will begin to yield fruit in the near future”, it stressed.