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Another justification that has been put forward in support of Nigerian leaders’ seeming obsession with foreign loans is the fact that if a project requires a certain amount of money to be accomplished and it takes five years to generate that money naturally, it is better to take a loan with a reasonable interest rate and complete the project within a year or two, and use the regular revenue from the project to service and pay off the loan.
The worst leg of this debt crisis is the issue of Ways and Means Advances from the Central Bank of Nigeria which the immediate past administration abused beyond what words can describe. When he came on board, CBN Governor Olayemi Cardoso had to put his feet on the ground and warn that the apex Bank will no longer grant Ways and Means Advances to the Federal Government, unless the outstanding balance of about 30 trillion naira is settled.
While the total domestic debt was put at ₦65.65 trillion , the total external debt was ₦56.02 trillion , and the DMO stated that the total public debt grew from ₦59.12 trillion last December to ₦65.65 trillion as of March. The DMO’s report came as President Bola Tinubu repeated the sentiment recently and expressed his administration’s commitment to breaking the cycle of over-reliance on borrowings for public spending and the resultant burden of debt servicing it placed on the management of limited government revenues.
Cardoso doesn’t care so much about today. He doesn’t talk about temporary, pecuniary gains or short-term comfort. He is always about the future. He has presented the government with a template on how to balance debt with future. He talked about how to benefit from creditworthiness without setting a dangerous trap for the future generation of Nigerians. It is now left to the fiscal authorities to heed the voice of reason.
His words: “We must continuously provide our debt management professionals with the necessary training, mentorship, and technical assistance. Moreover, routine disclosure of our debt portfolios and borrowing activities is vital.
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