The Minister of Works and Housing, Babatunde Fashola, has said President Muhammadu Buhari’s borrowing is not a sin, defending his regime’s resort to loans to develop Nigeria’s infrastructure.
According to the Debt Management Office, Nigeria’s public debt stock reached N33.107 trillion (about $87.239 billion) as of March 31, 2021.
Mr Fashola, who spoke in Abuja at NANForum, said, ”It is in our own interest that government does some borrowing and spends it on investment because that sector contributes to the Gross Domestic Products (GDP) and contributes to employment.
“I do not support irresponsible borrowing, so let us be clear: there has to be some sense to this. So long as you are borrowing to invest and you are investing in assets, then we can have this debate from morning till night, and I don’t think I will come out unsuccessful.”
“I agree everybody must keep their eyes open about how money is being borrowed, what it is being used for, and whether the debt is sustainable,” Mr Fashola admitted. “We just delivered a rail programme through the Ministry of Transportation. That is a 100-year asset that you have got now. So some economists say wait until you gather the money; that’s bad economics.”
The minister pointed out that the recent loans obtained by the Federal Government would not mortgage the future of Nigerians.
The former Lagos governor further explained, “We came from a background of colonialism where we were told that if you go borrowing, you go sorrowing. So, my parents and their generation told us never to borrow. But while we were not borrowing, those who led the rules started borrowing.
“The largest debtors in the world today are from the West. But with borrowing, they have created super economies, built massive train terminals, massive airports, schools, and hospitals. And you know what is happening, we go to use them, and they charge us, so who is paying?”
Illustrating his point, Mr Fashola said, “I have heard people say they are mortgaging the future of people. As we are holding this meeting, one new baby has arrived. If you don’t prepare for him, you make that future bleak. As of the time we were building the Lekki bridge in Lagos, it was N29 billion. The child that was born then in 2010 is going to be 11 this year.
“If his mother carrying his pregnancy had crossed that bridge at any time, he used that bridge before he was born, and we had secured that asset for him before he arrived. If we wait until he is about 30 to build that bridge, we can’t buy it at N29 billion anymore.
“So, if he contributes to paying it, so be it because he started using it before he even arrived. Those who said don’t borrow have changed their minds. They have set parameters of debt to GDP, and within those parameters, you play very well.”
He warned “armchair economists” against castigating Mr Buhari’s penchant for borrowing, stating, “So, borrowing is not a sin. It is part of the essence of keeping the economy growing, and the armchair economists talking about public expenditure, for example, who have never run a government must be careful what they feed to the public.’’