Former Vice President Atiku Abubakar has raised alarms over the loans sought by President Bola Tinubu’s administration, asserting that they are driven by corruption rather than genuine needs for infrastructure and development.
On Tuesday, President Tinubu submitted a proposal to the National Assembly, requesting approval for a new external borrowing plan amounting to N1.767 trillion (approximately $2.209 billion) as part of the 2024 Budget (Appropriation Act).
Despite significant pushback from civil society and experts, the National Assembly quickly approved this request within 48 hours. If finalized, the loan will contribute to covering a budget deficit of N9.7 trillion for 2024.
Atiku, who was a presidential candidate for the Peoples Democratic Party (PDP), expressed particular concern regarding the loan’s exchange rate, which is pegged at 1 USD to N800. He noted that the current exchange rate from the Central Bank of Nigeria exceeds N1,600 to 1 USD, raising questions about the accuracy of the government’s financial planning.
In a statement, Atiku stated, “As Nigeria plunges deeper into debt, the National Assembly appears to have become complicit, reminiscent of its approval of loan requests during the previous administration under Muhammadu Buhari.”
According to data from the Nigerian Bureau of Statistics (NBS), Nigeria’s total public debt, encompassing both external and domestic obligations, reached N87.38 trillion (approximately $113.42 billion) by Q2 2023, a significant increase from N49.85 trillion ($108.30 billion) in Q1 2023—a staggering growth rate of 75.27%.
The NBS also reported that total external debt stood at N33.25 trillion ($43.16 billion), while domestic debt amounted to N54.13 trillion ($70.26 billion).
Atiku pointed to a recent World Bank report that listed Nigeria as the third most indebted nation to the International Development Association (IDA) and expressed concern over the government’s simultaneous proposal to borrow an additional N1.7 trillion to address a budget shortfall via Euro Bonds.
“What exacerbates this loan proposal is its valuation at an unrealistic exchange rate of 1 USD to N800, while the Central Bank’s rate is over N1,600. The National Assembly’s complicity is alarming,” he stated. “President Tinubu previously claimed that the Federal Inland Revenue Service (FIRS) and Customs have achieved record revenue collections. If that’s the case, why continue borrowing? There’s a lack of transparency that needs to be addressed.”
He further lamented, “These loans place an unbearable burden on Nigerians and are detrimental to the economy, particularly when they are not negotiated or utilized effectively. The relentless pursuit of these massive loans is fueled by corruption rather than genuine infrastructure needs. A report from Budgit, a budget oversight organization, indicates that the 2024 Budget is rife with unnecessary expenditures.”
Atiku expressed his dismay, recalling how the administration of President Obasanjo had previously liberated Nigeria from foreign debt, only to see the country return to a similar predicament.
“It is crucial that we exercise more caution and apply some mathematical rigor to this borrowing spree,” he concluded.
