OrderPaperToday – Chairman of the Senate Committee on Finance, Senator Solomon Olamilekan Adeola (APC, Lagos West), has said Nigeria’s debt burden is the fault of past administrations.
The revelation was made last Wednesday during consideration of the 2022-2024 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP).
According to the lawmaker, a huge part of Nigeria’s total debt burden profile, roughly estimated at N33 trillion naira were incurred by past administrations dating back to the military era.
He disclosed that most of the loans being repaid by President Muhammadu Buhari’s administration were loans accumulated from past regimes, such as the military era and the Peoples Democratic Party (PDP) administration under Ex-Presidents Olusegun Obasanjo, Umaru Musa Yar’Adua and Goodluck Jonathan, between 1999 and 2015.
Senator Adeola disclosed this when asked by the President of the Senate, Ahmad Lawan, to make clarifications on concerns raised by lawmakers. Particularly concerns over Nigeria’s debt burden profile during deliberation on the report of the Joint Committees on Finance; Local and Foreign Debts; Banking, Insurance and Other Financial Institutions; Petroleum Resources (Upstream); Downstream Petroleum Sector and Gas on the 2022-2024 Medium Term Framework.
Responding, Adeola said, “The borrowing you are saying is accumulated borrowing. Therefore, it is not a borrowing of this administration alone. The borrowing stems from the days of the military to the days when the democratic dispensation started.
“It is an accumulated loan, and it is not a loan that says that it is the current administration of President Buhari that has borrowed,” he said, adding:
“It is a loan that the previous administration has borrowed – the Obasanjo, the Jonathan, the Yar’Adua’s of this world. [And] since the business of government is a continuum, the President of the day has no choice but to continue to pay back all these loans that the previous administrations have borrowed. Thereby the debt burden on the country continues to rise.
“More than three-quarters of these loans you’re seeing were borrowed from the previous administrations. Thus, we are paying back – we are doing what is supposed to be done, the way it is supposed to be done.
“So, when my colleague said that for every sixty-seven naira of any loan that was borrowed, we are using to pay, he should know that more than sixty naira of it is loans borrowed by previous administration. And that is where we are.”
In his concluding remarks, the Senate President, Ahmad Lawan, blamed Nigeria’s economic predicament on the failure of past governments to prioritize the provision of critical infrastructure.
According to him, the situation has left the present administration with no other viable option but to seek external borrowing to fund capital expenditures in the national budget. “I believe that we have learnt so much from the clarification which the Chairman of the Joint Committee gave. Let me say this when you don’t make hay while the sun shines. This is the kind of thing you face.
“When we had plenty of money, we didn’t prioritize the construction of infrastructure in Nigeria. So we wasted our resources when we had much. “Today, we realize we need to construct infrastructure because that is the only way to develop the country. But, unfortunately, we don’t have the kind of resources we had before.”
Lawan went further to say that “now, our options are very limited because our revenues are limited. So I agree with all our colleagues who said we need to reduce borrowing. The Committee on Finance has been doing an excellent job of ensuring that Ministries, Departments and Agencies (MDAs), especially Government Owned Enterprises (GOEs), contribute more to the national coffers than they usually do. [And] that is why we have more resources today, more revenues or funds in the Independent Revenue Contribution.
“Our Committees need to do a lot of oversight because when we don’t do the oversight, we also come here annually to this kind of thing of non-remittance of funds. Committees are supposed to know how much a Ministry or Agency of Government receives and contributes or remit to the treasury. We actually need to up our game in the area of oversight.”
Courtesy: Office of the President of the Senate