CISLAC Ask Questions Of Presidency Framework To Sort Debt Profile, by Ezekiel O. Kayode
A concerned civil group, CISLAC, called on the Federal Government and the House on Wednesday to address the accountability crisis that has emerged from an unceasing procurement of loans.
The Civil Society Legislative Advocacy Centre says the country could no longer blame the state of the economy on the Covid-19 pandemic. Also, uncultured borrowings have placed the public finance integrity of the country at the lowest it has ever been.
On Tuesday, President Buhari sought the approval of the National Assembly to take on a fresh loan valued at $6.1 billion (N2.343 trillion at N379 to a dollar) to finance a part of the 2021 budget deficit which stands at N5.6 trillion.
The president’s letter to the National Assembly explained that the loan would fund projects from priority sectors like power, transportation, agriculture, education, defence and health.
CISLAC’s Executive Director, Auwal Rafsanjani, says the current trend of borrowings points to 2008 when “governments took on billions in dodgy private sector debt, Major corporations gouged on tax cuts, bail-outs and buy backs, foreclosures and austerity guttered our public sector.”
This was the presidency of Late Umaru Musa Yar Adua after the stock market crashed following the Great Recession of 2008.
“The current crisis exposes the urgent need to rebuild a strong and resilient public finance management,” Mr Rafsanjani said. “This will require more than incessant debt—to raise public revenues as that measure is neither sustainable nor an effective solution to the deeper questions of debt management.”
It is very important for all Nigerians, Mr Rafsanjani says, to mull over the management of debt generated by the Covid-19 pandemic even though the government is responsible for how the money is spent.
Mr Rafsanjani questions the essence of the national public finance management regime which was to save from collapse the economic system in place in the country—to save jobs and support the livelihood of Nigerians.
Nigeria risk being in the position of Greece, totally unable to finance its debt if the uncultured borrowings were to continue.
Like Nigeria, Greece economy suffered from the explosion of the world economy during the Great Recession of 2008. The already weak structure of the Greek economy forced the government into economic adjustment programmes that worsened the nation’s debt profile.
To be in the position of Greece, Mr Rafsanjani says, would destroy “people’s lives as well as all hope of economic recovery with a blind devotion to discredited austerity.”
Nigeria was already struggling with debt before the pandemic even after loads of deregulation, tax cuts and privatisation had been explored to boost the economy.
That public debt profile currently stands at N32.9 trillion ($86.3 billion).
The country must adopt a systemic change to National debt governance, Mr Rafsanjani said of the primary solution. “The National Assembly must insist on an analysis of debt repayment strategy to be in place as its key priority to approvals [of loan requests by the presidency].”