OrderPaperToday – Several Senators have expressed concern over continued borrowing to fund the country’s budget. The lawmakers made their feelings known during the debate on the general principles of the 2019 budget on the floor of the Senate today.
According to the 2019 proposal, a total sum of N2.2 trillion has been set aside for debt service, over N200 billion higher than the total outlay for capital expenditure.
The most scathing criticism on the issue of borrowing and debt servicing came from Senator Dino Melaye (PDP, Kogi) who described the country as a “chartered borrowing nation” claiming that the country now owes a whopping $43 billion in local and foreign debts with plans to acquire a fresh $12 billion loan underway.
“How do we fund the 2019 budget? Is it going to be based on daily contribution or do we borrow again? These are questions begging for answers.
“We are a chartered borrowing nation,” Melaye said.
He continued: “We cannot as a nation be borrowing again to fund the 2019 budget. Our external debt as I speak today is $23 billion, the highest in the history of Nigeria. Not under the military did we have this type of borrowing. That is to say the Federal Republic of Nigeria owes over $40 billion and over 60% of this amount has been incurred under this administration.
“Already, there is a plan to write the Senate where another $12 billion is about to be borrowed to service the Port-Harcourt/Maiduguri rail project. If the Federal Government succeeds in matter of few weeks to send that request of $12 billion to service the Port-Harcourt/Maiduguri rail project, our borrowing as a nation will be close to $60 billion. Then, we are now going to borrow again and put generations yet unborn in danger.
“All these monies we are borrowing, I want to ask my colleagues who are hell bent on supporting anything executive to tell this Senate what we have benefited (from the loans)”
Earlier, Deputy Senate President, Ike Ekweremadu expressed worry over the increased rate of borrowing by the Federal Government warning that it was “mortgaging of the future” of the country as the loans will have to be repaid at some point. He called on the Executive to imbibe creative ways of generating funds instead of borrowing all the time.
The Senate Leader, Ahmed Lawan, while leading debate on the budget, remarked that the rate of borrowing is “unsustainable” while Senator Barnabas Gemade (SDP, Benue) described it as “unacceptable”.
The lone voice that supported the borrowing culture of the executive was Senator Bala Na’Allah who stressed that the country is currently “under-borrowing” and there is no cause for alarm.
“If you compare our population and resources; both human and capital, economists will tell you that we are under-borrowing,” he submitted.
Other issues raised by the senators during the debate include the need to increase funding for agriculture, save money by removing fuel subsidy, and ensure a return to January-December budget calendar year.
All Senators who spoke advocated for the quick passage of the budget by the Senate. The debate on the budget is expected to resume on Tuesday, 19th March, 2019.
A breakdown of the 2019 budget shows that the total sum stands at N8,826,636,578,915. Out of this sum, N492,360,342,965 is for Statutory Transfers while N2,264,014,113,092 is budgeted for Debt Service.
The amount for Recurrent (non-debt) Expenditure is N4,038,557,664,767 while contribution to the Development Fund for Capital Expenditure is N2,031,754,458,902.