…. Suggest Alternatives.
By Dayo Omoogun
A coalition of forty-two Civil Society Organisations (CSOs) have jointly opposed the proposed loan of another 29.96 billion US dollars which the Executive recently submitted to the Senate for approval noting that the same proposal had earlier been rejected by the Eighth National Assembly.
The groups are of the opinion that the move will endanger the economy as debt servicing will move from the current 54% of revenue to a choking 65%. Referencing a Debts Management Office report which put the national debt at 83.8 billion US dollars as at June 30,2019, they argue that a further loan of 29.96billion dollars will bring the total to 113.7 billion which will invariably enslave the entire nation to creditors.
“We emphasize that if at a debt level of $83.8billion, Nigeria is deploying over 54% of her revenue to debt service, the country, after taking the new loan of $29.96billion, will need not less than 65% of her revenue to service a new debt level of $113.7billion.”
They also expressed fears that due to volatility in the price of crude oil which is the main source of Nigeria’s economy, the country will most likely be faced with very difficult choices of either not living up to the obligations or paying up at the cost of non- development of the country as well as tougher living conditions for the people.
“We also emphasize that foreign currency denominated loans come with exchange rate risks, considering the volatility of the price of crude oil which is Nigeria’s major foreign exchange earner. In the circumstances, we further emphasize that the country after taking the new loan will be faced with extreme options, a default in its debt repayment obligations or extreme cuts to basic social services including education and health.”
In the opinion of the organisations, there is nothing on ground in terms of infrastructure to support the current level of 83 billion dollars neither is the revenue
generation envisaged in the new Finance Bill and other efforts good enough to address their concern.
We stress that there are various options apart from sovereign debt for the funding of capital and infrastructure projects, especially in the proper management and accountability of available resources from taxation and the oil and gas sector.
Rather than embark on a borrowing spree, the organisations made the following suggestions and demands:
“As a preliminary measure before considering new loans, to set the limits of consolidated debts for the Federal, State and Local Governments in accordance with section 42 (1) of the Fiscal Responsibility Act.
The National Assembly to hold public hearings on the President’s loan request and to reflect the opinion of majority of Nigerians in the approval or disapproval process.
To immediately start the implementation of the National Integrated Infrastructure Masterplan (2014-2043) which will lead to policy reviews, steps and measures to ensure that budgetary outlays will attract private sector investments for infrastructure development. This will include the review and full implementation of the Infrastructure Concession Regulatory Commission Act.
To plug all leakages in revenue especially from the opaque activities of the Nigeria National Petroleum Corporation in a bid to get more revenue to fund projects.
To immediately start work on the enactment of the Petroleum Industry Bills which will liberalize the petroleum and gas sector and garner more revenue to the Federation Account. This should be concluded before the end of the second quarter of 2020.
Cut the cost of governance by cutting down on the bloated expenditure of the bureaucracy especially in the executive and the legislature.”
Some of the Organisations that are party to the stand include: Centre for Social Justice (CSJ), Civil Society Legislative Advocacy Centre (CISLAC),Centre for Democratic Research and Training (CRDDERT), Civil Society Network Against Corruption (CSNAC)Human and Environmental Development Agenda (HEDA Resource ( Centre),Centre for Democracy and Development (CDD),Partners for West Africa – Nigeria, Centre for Information Technology and Development (CITAD), Socio-Economic Right and Accountability Project (SERAP) International Refugee Rights Initiative (IRRI), Zero-Corruption Coalition (ZCC), Accountability Maternal New-born and Child Health in Nigeria (AMHiN), Partners on Electoral Reform, State of the Union (SOTU), African Centre for Media and Information Literacy (AFRICMIL), National Procurement Watch Platform, Say NO Campaign—Nigeria
Resource Centre for Human Rights and Civil Education (CHRICED), Social Action International Press Centre, WANGONET, Community Action for Popular Participation, Borno Coalition for Democracy and Progress (BOCODEP) Institute of Human Rights and Humanitarian Law, Alliance for Credible Elections (ACE), Youth Initiative for Advocacy, Growth & Advancement (YIAGA), Tax Justice Nigeria
Environmental Rights Action/Friends of the Earth, Nigeria, Women In Nigeria
Others are: African Centre for Leadership, Strategy & Development (Centre LSD), HURIDAC Protest to Power Network on Police Reform in Nigeria (NOPRIN Foundation),Rule of Law and Accountability Advocacy Centre (RULAAC), Citizens Wealth Platform (CWP), Global Rights, Centre for the Advance Social Science (CASS), Alliances for Africa, Praxis Center Project Alert.