SENATE president Senator Ahmad Lawan has revealed that Nigeria has no option than to keep borrowing money to fund infrastructural projects because the country is poor and does not generate enough wealth internally.
As of December 2020, Nigeria’s public debt was N32.9trn ($86.3bn) according to the official data from the Debt Management Office. Of this total, N12.7trn ($33.3bn) was external debt, contracted
by the federal government, while N20.2trn ($53bn) was domestic debt, including loans taken from commercial banks.
According to the African Development Bank, Nigeria has an annual infrastructural deficit of $100bn, so with an annual budget of just $33bn, the government has no option than to borrow heavily. With vital sectors of the economy such as power generation, railways, housing, healthcare, etc, all requiring massive investment, Senator Lawan said it is not reasonable for the federal government to tax the people more in the face of the present economic conditions, so borrowing is the only option available.
Senator Lawan said: “You can’t, in my view and judgement, tax Nigerians further for you to raise the money for infrastructural development. Other countries do that but we have a serious situation across the country, so, you can’t put taxes on the people.
“The only option left is for us to borrow responsibly, utilise prudently and economically and ensure that the projects are self-sustaining, so that they can pay back the loan. Our options are really very limited as a country, as first of all, we don’t have the necessary revenue.
“Nigeria is poor, we shouldn’t deceive ourselves. Nigeria is not rich given the circumstances we live in, given the challenges we have.
“Our resources are so low and our revenues are so low, so therefore, the option of not doing anything just to sit because we’ve no money, is not an option worthy of consideration. You cannot keep the economy stagnant.”