The rising debt profile of the country dominated discussion Wednesday when the Senate opened debate on the general principles of the 2019 Appropriation Bill.
Most of the contributors to the debate asked the executive to exercise some level of caution on its borrowing plan in order not to return the country to a heavily indebted nation it exited in 2005 through Paris Club debt relief.
Senate Leader, Senator Ahmed Lawan, kicked off the debate when he read “A Bill for an Act to authorize the issue from the Consolidated Revenue Fund of the Federation the total sum of N8,826,636,578,915 only, of which N492,360,342,965 only, is for Statutory Transfers, N2,264,014,113,092 only, is for Debt Service, N4,038,557,664,767 only, is for Recurrent (Non Debt) Expenditure while the sum of N2,031,754,458,902 only is for contribution to the Development Fund for capital Expenditure for the year ending on 31st day of December, 2019.”
Lawan in his lead debate gave an overview of the 2019 budget projections.
The Yobe North Senator noted that the budget deficit will be funded through borrowing but added that the country has the capacity to take care of its debt profile.
He said that borrowed fund is specifically meant to fund and close the gap of infrastructure deficit in the country.
He also noted that the country has not exceeded its borrowing capacity and limit.
Lawan said, “About 89% of the deficit (N1.65 trillion) will be financed through new borrowings while about N210 billion is expected from the proceeds of privatization of some public enterprise. Debt Service/ Revenue Ratio which was high as 69% in 2017 has led to concerns being raised about the sustainability of the nation’s Debt. Therefore, while the National Debt remains sustainable, it is imperative that we tackle our revenue problem so that we do not end up with a debt sustainability issues.
“The 2019 Budget seeks to stimulate the national economy, making it more competitive by focusing on infrastructural development, delivery of inclusive growth and prioritizing the welfare of Nigerians to safeguard lives and property; equipping farmers with high told, technology and techniques; empowering and enabling mines to operate in a safe and secured environment and training of our youths through revival of our vocational institutions to ensure they are competitive enough to seize the opportunities that will arise for this economic revival.”
Deputy Senate President, Senator Ike Ekweremadu, was the first to raise the alarm on the country’s rising debt profile.
Ekweremadu noted that though the budget estimates should be given expeditious consideration and passage in view of the time already lost, the borrowing plan contained in the Bill should be properly scrutinized.
The Enugu West Senator said that scrutinizing the borrowing plan became necessary to prevent the country from exceeding its borrowing limit when juxtaposed with the ratio of Gross Domestic Product (GDP).
Ekweremadu said, “Time is already running out on us as regards the consideration and passage of the 2019 budget estimates but the increasing borrowing proposals on our yearly budget is becoming unbearable.
“Yes, money must be sought for by any government to fund infrastructure but it must not be solely anchored on borrowing which in the long run, will take the country back to a problem it had earlier solved .
“Besides, there are other creative ways of funding such highly needed infrastructure.”
Senator Dino Melaye (Kogi West) in his contribution said that the debt profile of the country would soon rise to $60 billion from less than $20 billion it was before the present government came to power in 2015.
Melaye explained the components of the $60 billion debts profile to include $23 billion external debt and $20 billion local debts.
He said that another $12 billion was already being processed for presentation to the National Assembly to finance Port Harcourt to Maiduguri rail lines.
Melaye said, “Nigeria is gradually turning to a chartered borrowing nation under this government all in the name of funding infrastructure.
“This must be stopped because the future of the country and in particular, lives of generations yet unborn are being put in danger.”
Melaye noted that even with the high level of indebtedness of the country, “the government in power is planning to further devalue the Naira to about N500 to one US dollar.”
He said that the Nigeria Stock market suffered a loss of over N300billion loss immediately the result of the presidential election was announced.
He said, “Inflation is on the rise, unemployment rate is increasing, assumptions made for the budget estimates as regards $60 oil price benchmark and 2.3million barrel oil production level per day are unrealizable and unrealistic.”
Senators Shehu Sani (Kaduna Central) and Albert Bassey Akpan (Akwa Ibom North East) also sued for caution in the way and manner the country borrow money from lenders.
Senators Gbenga Ashafa (Lagos East), Adamu Aliero (Kebbi Central), Jibrin Barau (Kano North) and Deputy Senate Leader, Bala Ibn Na’Allah (Kebbi South) insisted that the debt profile of the country was not as outrageous and damaging as being portrayed by some of their colleagues.
Na’Allah specifically maintained that rather than saying that Nigeria is over borrowing, the country is grossly under borrowing when the total amount borrowed is compared with the population and human resources.
Senator Mohammed Ali Ndume (Borno South) on his own moved for the budget to be passed for second reading in view of the time already lost in its consideration in the Senate.
Senate President, Bukola Saraki ruled that the debate would continue and end on March 19, 2019.