Ali Ndume, the Senator representing Borno South recently raised vital queries about the foreign loans so far obtained by the Tinubu government. The exposes were heart-wrenching. According to the lawmaker, the loans were largely not for capital projects or verifiable tangible projects.
Ndume said: “Let me say that I am not against borrowing. America, Japan, China and other big countries do borrow. They borrow for fiscal, tangible and accountable projects, which they pay back over time. But my worry is what they (Tinubu government) borrow for. For example, in June 2023, they borrowed $500 million for a woman programme called NPMWPS. In the same 2023, another $800 million was borrowed to cushion the effects of the increase in the price of petroleum products.
“Again, on September 23, 2023, $700 million was borrowed for Adolescent Girl Initiatives. Again, in December 2023, $750 million was borrowed for Renewable Energy scale up. On June 24, 2024, $1.5 billion was borrowed for economic stabilisation. Then another $750 million was borrowed for technical support to stabilise Nigeria’s economy and scale up support for the poor.”
Ndume said by his calculation, the entire money borrowed was $9.45 billion, approximately N13 trillion. When asked whether the loans were with the approval of the National Assembly, Ndume said, “not to my knowledge.”
Finance Minister, Wale Edun, ought to provide clarifications. That was what I was expecting. As the Chief Finance Officer of this country, that would have been the most decent thing to do. Edun is the chief official responsible for managing Nigeria’s central government’s financial affairs, including fiscal policy, budgeting, and debt management. Almost two weeks after Ndume’s bombshell, Edun is still hushed.
Our own Chancellor of the Exchequer has suddenly lost his voice. I guess Edun has nothing concrete to say. So far, all the government officials who attacked Ndume (on behalf of the Tinubu government) did not address the issues raised by the lawmaker. The attackers went after the messenger’s jugular instead of responding to the messages. This is a subtle confirmation that Edun also has nothing to say.
Over the years, those running the show at the federal level have been reckless with foreign loans. They take loans irresponsibly, and Nigerians hardly feel the impact. Despite the huge loans since independence, poverty, disease and hunger pour in beloved Nigeria. What about the corruption that comes with foreign loans? The Obasanjo government came and wisely liquidated Nigeria’s foreign loans to ease pressure on repayment commitments. Unfortunately, the governments that came after him took this country back into the club of debtor countries. This time, on a larger scale. The Buhari government was most irresponsible. I thought the Tinubu government will be a bit different. This has not been the case.
No doubt, the Tinubu government has been reckless with foreign loans. Ndume’s bombshell is just a tip of the icebag. What is apparent is only a fraction of the overall issue. In terms of the impact on the people, this federal government has very little to show for all the foreign loans. They hug these foreign loans as if they are gifts. Now, external debt service obligations are mounting.
The Tinubu government spent $4.7 billion on foreign debt servicing in 2024. This was over 30 percent of its 2024 budget. Nigeria’s external debt servicing is projected to rise to $5.2 billion this year. This includes a $1.1 billion Eurobond repayment due in November. All these are putting more pressure on public finances. The minor delay in the payment of a Eurobond coupon due on March 28, 2025, is a reflection of the current challenges in Nigeria’s public finance administration.
Just like the Buhari government, servicing of foreign loans has been consuming a substantial portion of incomes of the Tinubu government. In budget 2025 budget, the Tinubu government earmarked N16 trillion for debt servicing. This is over 30 percent of the budget. Falling prices of crude oil may create a problem for this budget, particularly debt obligations. The truth is that Nigeria’s current account may swing into a deficit if oil prices stay low for a prolonged period. So, where then will the money for debt servicing come from?
My message to Tinubu today is straight forward: Enough of binge-borrowing. Enough of uncontrolled foreign loans. Previous borrowings have not, in the true sense of it, impacted on Nigerians. This is why this country is still in the club of third world countries. Hunger, disease and poverty still pervade our land amid the borrowings. I don’t know of any third world country that has attained development with foreign loans. I stand to be corrected. For Nigeria to attain development, the Tinubu government must think out of the box. All those running the show in beloved Nigeria must think out of the box. They must think imaginatively using new ideas instead of old ideas. Binge-borrowing won’t take Nigeria anywhere.