The President of the Senate, Ahmad Lawan, on Friday, admitted that the continuous foreign loans being borrowed by the Federal Government were a heavy burden on the country but said it remained a necessary option in view of the nation’s dwindling revenue.
The country’s current debt profile according to the Debt Management Office hit N33.10 trn as of the end of the first quarter of 2021.
This represents an increase of N191bn compared to the N32.91trn recorded in December 2020.
The DMO in a statement on Wednesday, had said the debt figures include the debt stock of the federal and state governments, as well as the Federal Capital Territory.
Lawan, who spoke at a news briefing in Abuja to mark the second anniversary of his administration, added that the Federal Government had no option than to take foreign loans to fund critical infrastructure as doing otherwise would make government to be irresponsible.
He said, “Many Nigerians are talking about the country’s debt profile. Before us in the Senate are two requests from the executive arm of government for loans that we have already approved to fund the 2021 budget.
“One is to construct critical infrastructure across the country. The second one is for investment in agriculture and other sectors of the economy including mining. The amount also includes loans guaranteed by the Federal Government for some states.
“The loans are not only for the Federal Government. Part of it belongs to the states. It is just that the Federal Government gives the guarantee.
“Let us imagine a scenario where we have no money as a country and yet for us to develop, the country would need to build infrastructure.
“What we have to do is to raise funds and there are so many ways to do this. Are we going to raise taxes? Can we afford to raise taxes in the current situation for us to fund the infrastructure and it is a must to have infrastructure like roads, railways and so on. Definitely, one option is out, and that is not to do anything.
“We cannot afford not to construct roads and other social amenities that would boost our economy. We cannot afford to raise taxes.
“The only option is to borrow, and to borrow, responsibly. Before we borrow, we have to identify those essential infrastructure that we need to provide for our economy to grow.
“We are not doing enough to educate Nigerians on some of these issues because many Nigerians feel that the debt burden is too heavy. Honestly, it is but permit me to have an opinion, it is a necessary burden because to do otherwise will be irresponsible of any government to keep an economy that is stagnated.
“We have to move on. But we must ensure also that those projects, when completed, are to generate revenue to pay for the debt.
“The job of the National Assembly is to look at the request and check whether those projects are identified as essential projects for funding with the loan.
“We have to ensure the fair distribution of the projects because Nigeria is so large but we have to touch every part.
“We have to carry every segment of the country along. One of the requests was seriously delayed because some of us felt that some part of the country was not included.
“We need to establish that the projects are evenly distributed. We also established that the conditions for taking the roads are favourable particularly the interest rates.”