CONFRONTED with sharply declining revenues, hefty budget deficits and barren buffers, Nigeria’s slow trot into a new external debt trap has progressed into a frantic gallop.
President Muhammadu Buhari’s request for parliamentary approval to take another $5.5 billion loan together with ongoing borrowing plans has sent alarm bells reverberating around the world. Borrowing may indeed be inevitable; borrowing the right sums for the right purpose and restructuring the economy for sustainable growth are however more important.
Buhari and his team face daunting challenges and the option of taking the easy way out could be very tempting. As Kemi Adeosun, the Finance Minister, has repeatedly said, the government aims to spend its way out of recession and on to the path of growth, which explains the latest $5.5 billion external loan lunge. This, however, is only part of the $29.9 billion total borrowing plan for 2017 and 2018. Add this to the existing debt stock of $15.04 billion by June end and federal domestic debt of N12.03 trillion and the alarm bells ring louder.