Nigeria, the most populous Black nation in the world, with a population of approximately 212 million people is a self-acclaimed Giant of Africa.
The country leads the African continent on many fronts, but her increasing loans continue to discredit its future prospects.
Although successive governments in the country have played major roles in plunging the country into debt, critics of the Muhammadu Buhari-led government say he has made matters worse.
A huge percentage of the country’s annual budget is always channeled towards servicing existing loans. This leaves the government to depend on more loans for capital projects and operational costs.
Recently, the Nigerian House of Representatives in the country approved another $22.7 billion loan request made by the president. This is coming a few weeks after the Nigerian government secured a $3.4 billion COVID-19 assistance fund from the International Monetary Fund (IMF).
Critics and political observers have faulted the decision of the House of Representatives and Senate to always approve loan requests by the president. They argue that the lawmakers have become a rubber stamp of the presidency, and do not rational analysis before approving the loan requests.
Nigeria does not only have a huge foreign debt but also has an ever-increasing local debt. The country’s borrowing from its Central Bank hits N19trillion in 2022.
Borrowing through Ways and Means Advances from the Central Bank of Nigeria (CBN) by the federal government has risen from N17.46 trillion as of December 2021 to N19.01tn as of April 2022, according to data from the apex bank.
The figure represents an increase of N1.55 trillion within the first four months of 2022.
The N19.01 trillion owed to the apex bank by the Federal Government is not part of the country’s total public debt stock, which stood at N41.60 trillion as of March 2022, according to the Debt Management Office.
In the same vein, a report by the Debt Management Office (DMO) says Nigeria’s total public debt stock increased to N41.60tn in the first quarter of 2022.
Another loan channel that critics say is most disturbing is the country’s debt to China. Nigeria’s borrowing from the Asian giants has accumulated to 89.94 percent to hit $3.67bn.
Meanwhile, the National Bureau of Statistics data on foreign trade, unveiled that China is responsible for most of the imports into Nigeria.
To facilitate the loans, the Nigerian government has continued to mortgage the future of the country by granting free entry into its markets to Chinese companies. The move has seen a decline in local production.
The World Bank recently approved Nigeria’s request for a $1.5 billion loan. The new loan provision takes the country’s debt to the World Bank to $8.52 billion.
Nigeria has over the years relied on loans from the World Bank to finance/facilitate many projects, even on occasions when such policy moves were controversial.
Political critics and many financial experts claim that the future has been completely mortgaged as the country has been caught in a debt circle which will affect its prospects.
What are your thoughts?