BY MARK ITSIBOR, Abuja
Minister of works and housing, Babatunde Fashola, yesterday faulted the repayment of federal government’s debt by the administration of former president Olusegun Obasanjo.
According to Fashola, the repayment was done in error, as it was not a priority for Nigeria as of 2005.
The former Lagos State governor, said the funds should have been invested in the building of the nation’s infrastructure, especially in the housing sector that was in dire need of government intervention.
He added that he would have opposed the idea if he was a federal minister in the Obasanjo-led administration.
Fashola made the remark at a townhall meeting that was organised by Business Hallmark, with the theme, “Nigeria’s infrastructure revolution; Road to a new future.”
Obasanjo initiated a process of debt relief for Nigeria, which eventually paid off as some of its creditors under the Paris Club agreed to write off $18 billion or 60 per cent of the $30bn Nigeria owed the cartel. The creditors had said that they would go further to raise the amount of the debt to be cancelled to $20bn or 67 per cent.
Following the Paris Club action, the deal was completed on April 21, 2006, when Nigeria made its final payment and its books were cleared of any Paris Club debt. Nigeria paid the sum of $12 billion out of the $30 billion debt while the balance of $18 billion was wiped off.
Fashola is of the view that the $12 billion cash that was paid to the creditors at the time ought to have been channelled in building infrastructure to boost the nation’s economy.
“Our government in 2005 as a matter of policy decided to go and pay debt of $12bn cash but our house was in a very dire need. That was a policy choice. I would have opposed that decision if I was in government because we needed to invest urgently at that time.”
“If we had invested, the results of those investments would have earned us more revenues, much more income and would have put us in a better position to service those debts. Fast forward to 2015, after paying $12bn, we are now owing $32bn.”
“We look for the resources, invest them in infrastructure and use the returns to pay back this loan,” Fashola said at the event that took place in Abuja yesterday.
Also, Secretary to the government of the federation, Boss Mustapha, who was at the event said the Muhammadu Buhari-led administration has delivered significantly on infrastructure provision despite scarce resources and COVID-19 disruptions.
According to the SGF, the administration has developed an infrastructure masterplan that identifies critical enablers with consisting micro economic framework and realistic infrastructure investment plan.
“For the 23-year period, $2.3 trillion will be required, translating to about $150 billion annually. The private sector and other partners have agreed to provide 56 per cent, while the federal government and state governments will provide 44 per cent of the shared investment to be dedicated for implementing the masterplan,” he said.