Published On: Mon, Oct 23rd, 2017

Fresh controversy over foreign loans: Experts challenge FG’s claims

JOHNMARK UKOKO

Iyalode Alaba Lawson, NACCIMA President

As the debate on whether the country should obtain the $5.5 billion loan from global financial institutions or not rages on, the umbrella body of Organized Private Sector (OPS), the National Association of Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA), has backed the Federal Government intention.

This fact is contained in a press statement made available to Business Hallmark and signed by the association’s President Iyalode Alaba Lawson, and said the chamber supports the government move if that will enable the government to implement the 2017 budget fully.

According to the statement, since the government said the $5.5billion being sought through the International Capital Market (ICM) will be used in refinancing maturing domestic debts in order to manage the country’s internal debt stock, it should be allow to obtain the credit facility.

The Association said that this will reduce the crowding out effect being experienced in the financial system by the real sector but cautions that high interest rates and inflation continue to pose enormous challenges to entrepreneurs in Nigeria and may limit the impact of this initiative.

The Association said since the remaining $2.5 billion is being sought to finance the 2017 budget deficit and fund projects like the Mambilla hydro power project, rail project, second Abuja airport runway and the construction  of the Bodo – Bonny road, the loan is desirable.

The statement however called for a prompt and assiduous implementations of the budget as well as sustained momentum in ensuring that the economy stays vibrant and investors confidence is sustained.

The Association also strongly cautions that the intended projects should be keenly appraised and fully monitor for effective and efficient application of the borrowed funds.

NACCIMA called on the government to provide a robust feedback mechanism through which the           private sector as a major stakeholder can review the progress of its policies, projects and programs. It implored the government to continue to ensure a disciplined and coordinated approach to fiscal and monetary policy implementation.

The statement also appealed to Nigerians to support the government in its effort to provide the country with critical infrastructure, adding that the government should be supported to complete abandoned projects which dot the entire country.

However, a development economist Mr. Jude Osaguna in an interview with BusinessHallmark last week said the country does not need an additional loan to survive. Osaguna said he was against any additional loan because the country is being over burden with heavy loan hanging on its necks, adding that what the country needs now is a judicious application of its meager resources.

He lamented that the government has not been able to block the leakages, adding that with sincerity of purpose and prudent financial management the country would be able to meet its financial needs, noting that any additional loan would impact negatively on the country’s economy.  Osaguna said what the country needs now is prudent and judicious application of the little it has, rather than resorting to more loan facility.

“In my view the country doesn’t needs an additional loan.  If the government is able to block the leakages and sincerely diversify the economy we will see that the country will earn more than what it intends to borrow.

“Few years ago we all rejoiced that our country has exited the indebted league nations, few years after we are now back on the list as a major indebted nation of the world.  The incoming generations will inherit the massive debts we are today incurring for them,” he said.

The economist cautioned government to wear its thinking caps to fathom out other sources of revenues to meet its developmental needs, rather than borrowing.

According to him, our problem is not lack of fund but the judicious use of the little we have. We should look for ways of blocking the leakages that have drained the country of its hard earn resources, he noted.

The economist advised the government to heed the World Bank and the International Monetary Fund (IMF) warning not to go for another credit facility, stressing that the global financial warning is apt and government should do well to heed it.

He enjoined the government to be more transparent in its dealings as that is a sure way to reduce leakages, as the previous loans have not been used for the intended purposes.

Osaguna appealed to the government to do more of its promise to diversify the country’s economy, explaining that the era of relying on the revenue from crude oil alone to run the country is long gone. The economist stressed that huge debts would compound the economic problems of the country if it is not well managed by the current and successive administrations.

He also urged the government to make do its promise to publish all the recovered loots in its custody and publish the looters to stem the tide of massive looting of the country’s funds by greedy unpatriotic politicians, civil servants and top brass of the military officials.

“I commend the government for promising to release the names and the amounts this government has recovered so far from those who looted our funds. This will be a bold marker, as successive administrations would also do so to these set of government’s officials who soil their fingers in our common treasury”.

 

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