In order to bridge the infrastructural deficit in the country, the Federal Government has declared that it will require borrowing at least $22.7 billion.
The Minister of Finance, Budget and National Planning, Hajia Zainab Ahmed; her Works and Housing counterpart, Mr. Babatunde Fashola, that of state for transport, Senator Gbemisola Saraki, as well as the Director-General of the Debt Management Office (DMO), Ms. Patience Oniha, made the disclosure at an interactive session with the House of Representatives’ Committee on Aids, Loans and Debt Management led by Hon. Safana Dayyabu (APC, Katsina).
The ministers, who were before the committee to defend the loan request of $22.718 billion made by President Muhammadu Buhari, underscored the urgent need to fund the budget, improved on infrastructure development and create jobs with the loan.
According to the DMO, Nigeria’s Total Public Debt Portfolio as at June 30 stood at $83.88 billion (N25.7 trillion).
The 8th National Assembly had received the proposed projects for 2016 to 2018 Medium Term (Rolling) External Borrowing Plan put at $30 billion.
The ministers, however, presented the same proposal at $22.7 billion and gave reasons why the country should have funds as soon as possible.
They emphasised that the loans would promote infrastructure development and job creation.
In her lead presentation, the Finance Minister, Ahmed said: “We need to invest in roads, rails and to be able to grow at a growth better than we are growing now. They are strictly for infrastructure development so that we can address the deficit that we have. We know we must comply with some criteria.”
Defending the proposed loan, the minister said that “Nigeria does not have a debt sustainability problem, but revenue challenge.”
She added that “every kobo borrowed will be judiciously used.”
Also speaking, Fashola said that the government cannot ignore the demands for infrastructural sustainability. “It is right to have this hearing because we cannot ignore the concerns of the members of the public over the debt profile of the country.
“As we cannot ignore the concerns about debts, so we cannot ignore the concerns and demands for the provision of life sustaining infrastructure.
“So, everybody wants a road, everybody wants a rail project, everybody wants a port and efficient airports. They want to ensure that our ports are efficient so that business can function more effectively, so that clearing of goods can happen more quickly and cheaply.
“And in the midst of these physical challenges, the revenue is not just enough to meet these challenges.”
Fashola said that there are a total of 524 ongoing road projects across the country, but there is no money to execute them, adding that “524 roads projects are currently being executed. N73 billion was released this year. We have contractors willing to do the work, but we cannot pay them.
“We have had deficit budgets for a long time and so we have to borrow.
“Over four years, we have never received full funding for any budget. There is deficit and we cannot finance it.
“Some of the roads we are investing in will last for upwards of 20 to 30 years if well maintained and not abused. For rail assets, usually the tracks will last for at least 100 years. Power plants like the Mambilla will be there for many decades.
We must find a way to finance these assets. We will be spending today’s money to secure tomorrow’s assets.”
On the current status of East-West Road, the minister said it was not under his ministry, adding that a substantial part of the road had been completed.
“East west road is not under my ministry. It is under Niger Delta Ministry. I can say here, that a substantial part of that road has been executed. I drove through the stretch in 2016. Large part of it has been completed,” he said.
On Benin-Auchi-Okene road, the minister said: “From the briefings from Ministry of Finance, there are external borrowings. There are also internal borrowings. The road is being funded under SUKUK which is local borrowing. The SUKUK is not enough to fund all the roads. We get N100 billion, we shared it across all the six zones.”
He also denied insinuations that Nigerian roads were not built up to global standards.
“Nigerian roads are designed to global standards. We are not doing things as we want, but according to global standards,” Fashola said.
The view of the Minister of State for Transport, Gbemisola Saraki, was not different on why the Federal Government needed to borrow as she pointed out the need to complete Kano-Lagos and Niger Delta coast rails.