The budget deficit under President Muhammadu Buhari’s administration would hit record high at N55.3 trillion in eight years, with the passage of N21.83 trilli
And by the time Muhammadu Buhari leaves office on May, 29 when the debt management office says the public debt would have reached N77trn, every Nigerian by then would owe N385,000.The fiscal policies of the Buhari administration have also seen the country’s budget deficit to Gross Domestic Product rise to -4.7 per cent, the highest since 1999 when it was -5.4 per cent, according to data on trading Economics.
With N9.73 trillion to be funded with revenue, the government plans to raise N12.1 trillion through fresh borrowings, drawbacks from existing commitments by multilateral/bilateral partners as well as privatisation proceeds. “Our external borrowing sources are very much open at multilateral institutions and our focus is on those loans unless we have no option because loan processes are very long.
However, chief executive of Cowry Asset Management, Mr. Johnson Chukwu, warned that Nigeria may be heading in the same direction with Ghana if care is not taken. Already Nigeria spends more than 100 per cent of its retained revenue on servicing its loans. He said the assessment of the IMF is a red card, adding that ways and means, as prescribed in section 38 of the constitution, is for temporary borrowing that must be paid back in 6 months. It is not for financing capital projects.
He said, “It is unthinkable to people to invest when the money has already been spent. Who is the government going to pay back? Who owns the CBN? The CBN is part of the presidency. It is not another country.” “I don’t envy any government coming in. Debt is a problem on one side and other problems on the other side. And more importantly, these debts will be paid by the future generation. If we are not careful the future generations will abuse us in our graves because they will see the debt and not see what it was used for.
LEADERSHIP findings also shows that inability of the federal government to honor past loan agreements with EXIM bank of China has affected sustenance of the construction of Lagos-Ibadan and Kano standard gauge railway line. Umezurike pointed out that the international financial institutions will never take Nigeria serious if the federal government continues in its failure to honoring loan agreements, adding that, EXIM bank and CCECC are probably watching to know the party that will win the forthcoming elections for fear that the contract could be terminated if a new party wins the presidential election.
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