Atiku and LCCI Blame Tinubu for New N1.7 Trillion Loan Amid Swift Approval by Lawmakers – News – The Guardian Nigeria News – Nigeria and World News

• Atiku: Tinubu’s loans are crushing Nigerians
• LCCI: FG’s appetite for borrowing puts the economy at risk
• CSOs support FG loan, saying it is key to Nigeria’s growth

Former Vice President Atiku Abubakar has criticized President Bola Tinubu’s appetite for loans following yesterday’s swift acceptance of the President’s new N1.77 trillion (approximately $2.2 billion) loan request to support the N28.7 trillion 2024 budget .

This comes as the Lagos Chamber of Commerce has expressed serious concern that Nigeria is becoming the third-largest debtor to the International Development Association (IDA), part of the World Bank that provides grants and low-interest loans to help the world’s poorest countries.

Following yesterday’s approval of Tinubu’s latest loan application to finance the remaining six weeks of this year, Nigeria’s total debt has reached a record high of N136 trillion.

The President’s request was immediately approved in less than 48 hours, a record set by the 10th National Assembly. The President conveyed his request in a letter written to the President of the Senate, Godswill Akpabio, and the Speaker of the House of Representatives, Tajudeen Abbas, and read by the presiding officers at the plenary session on Tuesday.

The approval came at plenary on Thursday following the presentation of the report of the Senate Committee on Local and External Debt, chaired by Senator Aliyu Wamakko (Sokoto North). The Senate President gave the committee 24 hours to submit its report to the Senate for consideration.

External credit will be obtained through Eurobonds on the international capital market and other financial instruments. According to the committee report, the funds are intended to complete ongoing capital projects required by the 2024 Appropriations Act.

Making the case for the borrowing, Committee Chairman Wamakko explained that the loan will help in the implementation of Nigeria’s Debt Management Strategy, which aims to extend the maturity of the national debt, free up the domestic market for other borrowers and increase external reserves.

The Chairman emphasized the need for credit to ensure the successful implementation of key national projects and programs while addressing outstanding requirements and obligations.

Senate Deputy President Barau Jibrin, who presided over the plenary session, noted that the president’s request was simple and did not require lengthy debate. The proposal was adopted unanimously.

Likewise, the President’s request was unanimously accepted and approved by the House of Representatives yesterday. The approval follows the acceptance of recommendations by the House of Representatives Committee on AIDS, Credit and Debt Management, chaired by Abubakar Nalaraba.

Although the National Assembly is yet to begin debating the 2025 budget proposals as well as the 2025-2027 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) sent for consideration and adoption, Atiku criticized President Tinubu’s administration for that she has pushed Nigeria deeper into debt, accusing him of recklessness, corruption and mismanagement.

In a statement yesterday, Atiku condemned the base rate of the proposed loan, saying: “What makes this particular loan proposal even more alarming is that it is pegged to an exchange rate of US$1 to N800, whereas the current exchange rate of the Central Bank of Nigeria (CBN) costs between 1,600 naira and $1.”

He blamed the National Assembly for facilitating the borrowing frenzy. “Nigeria is falling further into debt and the National Assembly has once again become complicit.”

He questioned Tinubu’s revenue claims, saying: “In July this year, Tinubu boasted that the Federal Inland Revenue Service and the Nigeria Customs Service under his leadership had collected record high revenues to fund the budget. Why are they still taking out loans? There are some things they are not telling Nigerians.”

Atiku described these loans as harmful to citizens, warning: “These loans crush Nigerians and put unbearable pressure on the economy, especially when they are not properly discussed and utilized.”

He alleged corruption was behind the massive borrowing, saying: “It is worrying that the insatiable appetite for these huge loans is driven by corruption rather than by infrastructure and development needs.”

Reflecting on past achievements, Atiku said: “I feel a sense of personal agony to see that just a few years after the administration of President Olusegun Obasanjo led our country out of foreign debt, today we are once again on top of the same conundrum. »

Calling for financial responsibility, he concluded: “It’s time to bring more caution and arithmetic to the lending madness.”

In addition, LCCI said the business community is increasingly concerned about Nigeria’s fragile economic situation and the potential impact of additional borrowing on the country’s financial health.

In its statement, LCCI highlighted Nigeria’s already strained financial situation, with its debt-to-GDP ratio exceeding 50 percent and debt servicing costs threatening to eclipse capital expenditure in future budgets. The country, which is currently the third-largest IDA debtor with an external debt of approximately $17 billion, faces serious challenges in maintaining debt sustainability.

The Chamber, in a statement signed by its Director-General, Dr. Chinyere Almona, warned that the use of borrowing to finance the fiscal deficit without considering alternative financing strategies poses a serious risk to infrastructure development and economic stability.

He noted that growing debt service obligations could exceed allocations for critical projects in the 2025 federal budget, exacerbating the country’s infrastructure deficit.

The LCCI also expressed concern about currency volatility as the depreciation of the naira increases the burden of servicing dollar-denominated debt. The CBN’s efforts to stabilize the foreign exchange market have yet to yield meaningful results, further complicating debt repayment strategies.

To address these issues, the LCCI recommended a number of measures, including that the government should ensure transparency and accountability in the use of borrowed funds.

Funding for critical business support infrastructure, such as power, food safety and logistics, and the production of related products, should be of paramount importance, the chamber believes.

It noted that in addition to borrowing, the federal government should intensify efforts to expand the non-oil revenue base through tax reforms, improved compliance and promotion of export-oriented sectors such as agriculture and industry.

However, some civil society organizations (CSOs) have supported the federal government’s request for a $2.2 billion loan, calling opposition to the move misguided and ill-informed.

Organizations including Economic Advocates, Center for Social Justice, Equity and Transparency (CESJET) and Good Governance Advocacy Network said the proposed $2.2 billion loan aims to support vital industries that benefit Nigerians.

Representatives of civil society organizations said the President Tinubu-led administration has demonstrated sound financial management by meeting financial obligations to foreign creditors, earning the country a reputation for being responsible in borrowing and repaying.

Speaking at a press conference in Abuja, the convener, Dr. Emeka Theodore, noted that Nigeria’s borrowing plans are in line with international best practices, with a manageable fiscal deficit of P8 trillion in the 2025 budget.

CSOs called on opposition politicians to abandon populist positions and acknowledge the realities of governance. Theodore denied that the loan request would have disastrous consequences for ongoing programs and projects, potentially stalling infrastructure development, healthcare expansion, and education reforms.

He said the borrowings will support revenue plans and institutional improvements. Investments in digital technology, infrastructure and changes in agriculture will improve tax collection efficiency, diversify revenue streams and stimulate exports.