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FG can borrow till eternity, says APC National Chairman



The National Chairman of ruling All Progressives Congress (APC), Abdullahi Adamu, yesterday came under attacks over his comments that the federal government could borrow till eternity to fund the country’s infrastructure regeneration.

Adamu, while speaking in an interview on Trust Television late Monday, had said countries like the United States and the United Kingdom borrowed funds from international financial institutions to meet their needs.

Adamu said:  “I remember a programme we had here, I told you and I thought you believed me that I have no quarrel with government borrowing. Government can borrow from here to eternity. The American government borrows, the Canadian government borrows, the United Kingdom borrows, France borrows money from the World Bank and such other institutions.

Nigeria is no exception, what I quarrel with is if the money is not used for a purpose and the infrastructure we are developing across the country is from this source.

“You also have to appreciate the fact of the level of revenue accruing to the government, oil is the main thing.. We want to see how best we can diversify. These issues affecting the revenue accruing to the government are not our making.  No matter how good we are, they happen.

“When some countries sneeze, we catch a cold. The Ukrainian crisis with Russia is having an impact on our economy and even in bigger economies than our own, so why do we limit ourselves in our thinking.”

His position was, however, faulted by the Nigeria Employers’ Consultative Association (NECA), Labour Party and other economy experts who noted that the nation’s debt profile had become unsustainable, in the face of dwindling revenues, stressing that there were alternative ways of funding infrastructure.

They also added at further increase in the   national debt could lead to high inflationary economic growth or no growth at all, a much higher cost of capital in the economy, and possible sovereign default and its damaging effects.

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NECA said there were alternative ways of funding infrastructure, adding that debt should not be the first option.

The umbrella body for employers in the country equally expressed worry over whether the funds being borrowed would be judiciously used, considering past experiences.

The Director-General of NECA, Wale Oyerinde, said: “While we are not against government’s borrowing to fund critical “Cash-Back” infrastructures, we are, however, concerned about the propriety of the borrowing at this time when it has become expedient to drastically reduce our exposure to further debt.

‘’Of concern also is whether the funds would be judiciously used, considering past experiences.  It is no news that the nation’s cost of governance is abnormally high and overboard. Rather than borrowing being the first option in view of current economic realities, it would be reasonable for the government to realign its priorities and look inwards.

‘’There are several moribund government structures and assets that could be leased or sold off, rather than leave them in a perpetual dilapidated state.

“In the last decade, government borrowings have been to fund recurrent expenditure and expensive governance, leaving the country in huge debt with consequences for current and future generations. ‘’While experts continue to aver that our debt-to-GDP ratio is healthy, the real challenge we must address is our debt-to-revenue ratio which, according to the Minister of Finance, Budget and National Planning, is tending towards negative.”

Spokesman of Labour Party, Dr. Doyin Okupe said:   “Such statement shows the level of how myopic the ruling party can be about the future of Nigeria youths.

‘’It shows they don’t have any good plan for Nigeria. Do they want foreigners to take over Nigeria? It is high time the National Assembly sat-up and   prove to Nigerians that they are not rubber-stamps as they are being perceived by many.”

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Investment expert and CEO, Wyoming Capital and Partners, Tajudeen Olayinka, said in his reaction: “I think APC chairman spoke from the position of ignorance. While a sovereign nation can borrow money from multiplicity of sources, through issuance of debt instruments to investors from all across the world, including domestic investors, or make special arrangements with bilateral or multilateral sources, the question of perpetuity of such borrowings depends largely on the capacity of the sovereign nation to refinance her matured or maturing obligations timeously.

“Interestingly, the capacity to refinance debts is a function of the ability of the sovereign nation to manage debt sustainability. Where sustainability is in doubt, it might be difficult to raise additional finances under such terms and conditions that are supportive of the country’s economy.

“In other words, debt instruments issued by a country experiencing sustainability problems could attract higher or outrageous yields, inimical to economic growth and development.

“In fact, such instruments are treated as junk bonds in the international capital market. If care is not taken, especially with the way Nigeria is beginning to have difficulty improving her revenue generation capacity, relative to her debt service obligations, the country might fall into that negative territory in no distant future.

‘’So, it is important that the government should begin to retrace its steps in good time, in order not to put the economy in a big mess. Private sector-driven economy requires much lower public debts, and could produce a better economy for all.”

On the consequences of eternity borrowing by Nigeria, Olayinka said: “The economic consequences of unsustainable debts are: high inflationary Gross Domestic Product, GDP, growth or no growth at all, a much higher cost of capital in the economy, possible sovereign default and its damaging effects, unemployment could become a major issue, persistent macroeconomic imbalances, etc.”

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Reacting as well, Prof Uche Uwaleke , President, Association of Capital Market Academics and a former Finance Commissioner in Imo State, said : “The key question this raises is for what purpose are we borrowing?

“If the loans are self-liquidating, then there is no cause for alarm. But, if they are not well applied such that the country’s debt burden is aggravated, thereby mortgaging future generations, then it does not make sense to borrow.  ’In sum, borrowing is positive for Nigeria only when it advances economic growth and development.”

In his reaction, Chartered Stockbroker and Managing Director/CEO, Sofunix Investment and Communication, Sola Oni, said: “Government’s penchant for reckless borrowing signifies poor management of resources.

‘’Deployment of Ways and Means Financing, WMF, which is continuous printing of currency, has dire consequences of unsustainable payment of interest and loss of confidence in the sovereign status of such a country in the international financial market.

‘’Rather than indulging in a borrowing spree, the Federal Government should take advantage of immense opportunities for capital injection in the financial capital market to raise development funds at cheaper rates.”

President Muhammadu Buhari has been criticised for the increased borrowing of the Federal Government since the inception of the administration in 2015.

This led to N29 trillion or 67 per cent   increase in the national debt to N41.6 trillion at the end of March 31, 2022, from N12.6 trillion at the end of 2015, as the Federal Government continued reliance on borrowing to fund its annual budget.

Recently, the Minister of Finance, Zainab Ahmed, disclosed that FG had to borrow N3.09 trillion between January and April this year to fund its expenditure and service its debt during the period. During the four month period, the FG recorded revenue of N1.63 trillion, spent N4.72 trillion out of which N1.94 trillion was spent on debt service. (Vanguard)

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PDP demands probe of Supreme Court fire disaster



The Peoples Democratic Party, (PDP) has demanded a thorough investigation into the fire incident that gutted a section of the Supreme Court in the early hours of Monday.

The party raised the alarm over the incident which it described as suspicious giving the fact that a verdict on a sensitive issue of national importance is being expected.

National Publicity Secretary of the party, Debo Ologunagba made the position of the opposition party on the fire incident known in a statement on Monday.

He said, “The PDP is worried over the fire outbreak especially given heightened public apprehension of possible arsonist attack with the intent to cripple and frustrate the Supreme Court from effectively discharging its constitutional duties especially with regard to high profile electoral cases including the Presidential Election Appeals pending before it.

“Our Party demands for an immediate full-scale investigation into the fire outbreak with the view to unraveling the circumstances or possible sabotage in the incident.

“The PDP insists that the outcome of the investigation should be made public unlike those of previous fire incidents in various government Ministries, Departments and Agencies which were characteristically swept under the carpet by the All Progressives Congress (APC) administrations.

“While calling on the Federal Government to beef up security around the Supreme Court, the PDP also demands that Nigerians must be assured of the safety of sensitive documents and equipment at the Court especially at this critical time.”

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Gov. Mbah tasks FG on New Road Maintenance Model as bridge collapses along Enugu-Port Harcourt Expressway



Gov Peter Mbah (centre) and some government officials during inspection of the collapsed bridge in Enugu on Monday

…urges FG to concession roads to states

Governor of Enugu State, Dr. Peter Mbah, has called for a new road maintenance model to guarantee a better condition and longevity of Nigerians roads, regretting that the current model had failed woefully.

Dr. Mbah made the call when he visited the site of the collapsed bridge between the New Artisan flyover and the NNPC Mega Station along the Enugu – Port Harcourt Expressway.

The collapsed bridge

Fielding questions from newsmen after the first-hand inspection of the scene of the disaster, Mbah who thanked God that no life was lost despite the magnitude of the incident, urged the federal government to consider a concession of all the federal roads in each state to the state governments for proper maintenance in conjunction with the private sector.

“I think the question should be whether the current model of federal road maintenance is working or not; and I think that is the bigger question that we must ask.

“Today, we are here witnessing a tragedy that has just occurred. We are fortunate enough that no life was lost, but this could have been prevented entirely. So, the people can no longer ply this route because of this tragedy. This shows clearly that we do not have a sound federal road maintenance model.

“The bridge collapse didn’t just happen. These threats could have been identified if we had routine or regular maintenance.

“Perhaps the way to go is to find a way to concession these roads to the states. The states need to take charge of the roads within their domains and there has to be a conversation around the funding models”.

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Gov Mbah (R) inspecting the collapsed New Artisan Enugu bridge that collapsed on Monday

The said bridge collapsed on Monday, leaving commuters stranded.

Meanwhile, in a statement signed by the Enugu State Commissioner for Works and Infrastructure, Engr. Gerald Otiji, government has advised commuters to use Nza Street through New Haven or ply Ogui Road and Abakaliki Road to their various destinations, while the authorities come up with measures for immediate repair on the failed section of the bridge.

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Flyover bridge collapses in Enugu, no casualty



The collapsed flyover bridge in Enugu
The flyover bridge across the Enugu – Port Harcourt Expressway at the Enugu New Artisan market in Enugu state capital has collapsed.

The bridge collapsed Monday morning but an eyewitness said there was no casualty as artisans and residents were yet to come out from their homes for the day’s activity.

The eyewitness, an Auto Mechanic who identified himself as Nnamdi, told The Advocate that two lorries conveying goods which were on the bridge when the incident occurred were affected.

According to him, drivers and conductors of the two lorries, however, escaped unhurt.

The Advocate observed that one lane of the Enugu – Port Harcourt dual-carriage way had been blocked by the debris of the collapsed bridge forcing motorists playing the expressway to divert through alternative routes to continue their journey.

Security operatives, officials of the Federal and Enugu State Ministries of Works, Federal Road Maintenance Agency, Federal Road Safety Commission (FRSC) were sighted within the area to access the situation as well as to assist the road users plying the alternative routes.

Residents of Goshen Estate, Premier Layout, worshippers at the Dunamis Church and traders at the New Artisan market who are regular users of the bridge are likely to encounter serious traffic gridlock on account of the collapsed bridge, if an alternative route is not created as a matter of urgency.

The state government has yet to speak on the development by press time.

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