The Director-General, Progressives Governors Forum, PGF, Dr. Salihu Lukman says the higher budget deficits and the priority given to capital expenditure contributed to President Muhammadu Buhari borrowing more.
Dr. Lukman who argued that the APC-led government was more prudent than past administrations, noted that so far, the debate about Nigeria’s debt was based on the absolute value of the amount Nigeria owed, while variables of both Gross Domestic Product, GDP, and revenue are ignored in the debate.
In a statement, the All Progressives Congress, APC Chieftain, explains that President Buhari’s request for approval of a fresh external borrowing plan is to finance the deficit in the 2021 Federal Government budget.
Dr. Lukman said the funds were through sovereign loans from the World Bank, French Development Agency, EXIM Bank, and IFAD in the total sum of $4,054,476,863 and €710 million and grant components of $125 million.
Dr. Lukman said by June 2021, under President Buhari’s administration, Nigeria’s external debt had risen to $28.57 billion and domestic debt was N16.02 trillion from $7.3 billion and domestic debt was N7.9 trillion under former President Goodluck Jonathan’s administration.
Dr. Lukman while appealing to the Central Bank of Nigeria, CBN, to take every measure necessary to urgently stabilise the Naira exchange rate, appealed to all functionaries of the Federal Government, especially in ministries of Finance and National Planning to provide all the intellectual leadership required to convert the false accusation against the borrowing.
He reminded that Nigeria’s borrowing, both with reference to debt and GDP as well as debt and revenue ratio were still within the permissible economic threshold of below 60 percent and 46 percent.
Writing by Abubakar Bestu, editing by Abdullahi Lamino