It will not come to Nigerians as a surprise when the Ahmad Lawan-led Senate approves President Muhammadu Buhari’s recent request for a whopping $800 million loan 15 days to the end of his second tenure. It will be seen as following an inglorious pattern.
In his memo to the Senate, the President had asked the lawmakers to approve the loan ostensibly to ensure early implementation of the ill-conceived National Social Safety Network Programme.
He said, “the Senate may wish to note that the programme is intended to expand coverage of shock responsive safety net support among the poor and vulnerable Nigerians. This will assist them in coping with the costs of meeting basic needs”.
Obviously justifying the loan, the president added: “You may wish to note that, the Federal Government of Nigeria, under the conditional cash transfer window of the programme, will transfer the sum of N5,000 per month to 10.2 million poor and low-income households for a period of six months, with a multiplier effect on about 60 million individuals”.
He noted that the programme will ‘stimulate activities in the informal sector, improve nutrition, health, education and human capital development of beneficiary households.” How a paltry, if not miserly, N5000 will satisfy all these needs is left to the imagination in the face of galloping inflation and the prevalent and suffocating high cost of living in the country. Suffice it to recall that, if the experience from the implementation of similar programmes by this administration is anything to go by, then this loan and what is being claimed as the intention for adding that humongous sum to the nation’s already outrageously high debt profile is, at best, a bad joke taken too far.
Sadly, the new loan request is coming against the backdrop of widespread concerns over the nation’s huge debt stock with the head of the nation’s budget office, Ben Akabueze, disclosing that Nigeria was fast exceeding its limited borrowing space.
Similarly, we recall that a report by the National Bureau of Statistics (NBS) showed that in the third quarter of 2022, Nigeria’s public debt stock rose to N44.06 trillion from N42.84 trillion recorded in the second quarter (Q2) of the same year.
This newspaper is persuaded to argue that this loan request, at this time, is indefensible and the reason for it even less plausible. It amounts to over-burdening the incoming administration with garbage and baggage it can very well do without.
However, we make bold to say that the implementation of such programmes like the N-Power, Government Enterprise and Empowerment Programme (GEEP), National Home-Grown School Feeding Programme (NHGSFP), and Trader Moni programmes has generated mixed reactions from Nigerians amid allegations of fraud and discrepancies in the allocation of the funds to targeted beneficiaries. Some Nigerians even allege that those funds were deployed to buy votes. This loan, if granted, may end up in the wrong hands of party agents who may see it as their own parting gift.
This request, we insist, is decidedly worrisome, bearing in mind that the nation is battling with high debt service ratio because its revenue is too small to sustain the size of its debt. The worst parting gift an administration can give to its successor at its twilight is a fresh loan this size.
It is a given that if a country’s debt service ratio exceeds 30 per cent, such a country is in dire straits. What is Nigeria’s current debt service ratio? Analysts say the nation is inching towards 100 per cent. That, in our view, is enough trouble already.
For an administration that came on the mantra of fighting corruption, addressing insecurity and retooling the economy, but performed below expectations in all of these, the current administration can do well by not asking for more loans at this time.
This administration, in our opinion, will be wrong to imagine that it was in a position to resolve issues that had tested its will in the past eight years in these concluding days.
We find it hard to justify the request for a fresh loan. The senators, who have, over the years, cut a bad image for themselves, should strive to assuage the perception of them as a bunch of tepid and rubber stamp tools in the hands of this administration. Already, eyebrows are raising over the mad rush by this outgoing government to award stupendous contracts and initiate policies for the incoming administration. In our opinion, this loan request and others earlier taken, are booby traps that may dog the effectiveness and efficiency of the new administration. It is from that perspective that we urge the Senate President and his colleagues in the red chamber to see to it that this loan request did not sail through.
We consider the whole idea as totally ill-advised, ill-timed, inconsiderate and overly unacceptable.