$80 Billion in 3 Years: What is Nigeria's President Buhari Borrowing for?

The next Nigerian general elections has been scheduled to hold on 16 February 2019, so it is normal for missiles and counter-missiles to fly in the directions of the incumbent and the opposition as there appears to be a stiff battle between the two main candidates in the country.

Nigeria's current president, Muhammadu Buhari is seeking re-election under the ruling All Progressive Congress (APC) but faces a strong opposition from a two time Nigerian vice president (1999-2007) and strong political figure in Alhaji Atiku Abubakar who until recently was a top leader of the APC. 

In fact, reports making the rounds and yet to be denied by the APC claims that Atiku Abubakar stepped down for Buhari in the 2015 party primaries which enabled him become president.

So, it is not news that the ruling APC are fully aware of the caliber of opponent they stand to face at the pools and they cannot deny that he is a man with so much relevance and structure in the country to topple any political candidate at the moment.

 Atiku Abubakar who is now flying the flags of the People's Democratic Party (PDP) - the party removed from office in 2015 with his help and the same party under which he served as Vice-President for 8 years before jumping ships (and back again), in what appears to be a wise political decision has pick Peter Obi, the former governor of Anambra State and successful businessman as his running mate - giving representation to the Eastern part of the country in the highest capacity for the first time since the late 1970s.

While Atiku Abubakar has rarely spoken against the current administration as official campaigns are yet to begin in the country, his running mate Peter Obi has done a lot of damage to the current administration as he continues to appear in various Television shows both in Nigeria and abroad where he uses his in-dept understating of economics and business management to analyze the level of financial impunity going on under the current administration.

“This present regime has plunged us into a deeper debt profile to the tune of $80 billion (approx. 25 Trillion Naira), an indication that the nation is collapsing,” Obi was quoted by Vanguard newspaper in an interview on 24 October 2018.

This claims did not go down well with Nigerians as they were left in shock as to what the government had spent the funds on, considering that no tangible project or development has been executed in the country in their three years of existence.

This is not the first time these claims will arise though as various reports in the past have fingered the administrations excessive borrowing which they have nothing to show for. If these reports are anything to go by, then it is disheartening because it means that the country debt has doubled since Buhari took over just over three years ago.

According to Africa Check - a non-governmental, non-religious and non-partisan organization which promotes accuracy and transparency in government, Nigeria's debt as at march 2015 before Buhari took over was N12.1 trillion and this was at an official US Dollar rate of N196.95 to the dollar.

As at June 2018, the organization reports that Nigeria's debt has increased to N22.4 trillion. The Central Bank of Nigeria pegs the total debt at US$73.2 billion using Nigeria's 2018 exchange rate of N305 to 1USD.

Peter Obi, like many other critics have argued that the amount is higher than what was released by the Central Bank as it only represents the loans from official international lending partners like the World bank, IMF and China.

Supporting the claims, Atiku Samuel, the head of research at BudgiT - a civil society organization that promotes transparency and accountability in public spending, said:

“What you see at the Debt Management Office is just a fraction of Nigeria’s debt,” he said. “There are special accounts that are dedicated by law, but unfortunately the federal government has been taking funds from [them] to meet its budgetary obligations.”

Samuel said the government had been drawing from “funds like the ecological fund, even borrowing from the excess crude account . Another big component is debt to contractors and the overdrafts it takes from the Central Bank – which is now about N4 trillion – and there are also judgment debts.”

These would add to the debt “if you look at debt from the globally accepted definition, as these are still obligations to the government”.

What is most depressing is that reports reveal that the debt status would have even been higher if the government hadn't resulted to taking monies from funds set aside for other purposes. This means the nation is bleeding from both end.

What has President  Muhammadu Buhari and the current administration done with all these borrowed funds?