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FG can borrow till eternity, says APC National Chairman

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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.

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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.

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‘’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?

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“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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86-year-old woman set ablaze by daughter over alleged witchcraft

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Gunmen abduct Company MD, three foreigners in Lagos
A 45-year-old woman simply identified as Abiodun and popularly called “Iya Sunday,” has set her mother ablaze in a bid to kill her.

Abiodun was told by a Pastor that she would be free from a spiritual bondage after the death of her 86-year-old mother.

Witnesses said the suspect poured petrol on her mother and set her ablaze on Friday morning around 5am.

The incident happened at Surulere, opposite Anglican Cathedral Church in Ondo West local government area of Ondo State.

Gory picture of the victim showed that she sustained severe burns all over her body and receiving treatment in an undisclosed hospital.

An eyewitness, Sola Oladele, said the suspect came to her mother’s house in the early hours of Friday.

He said she called out her mother before pouring petrol on her and setting her on fire.

According to him: “What happened between them before the incident we don’t know, but the suspect has been arrested by police at the Enu-Owa division for further investigation.”

Abiodun said her action was because she was told that her mother was behind her predicament.

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She said: “I went to my mother’s house around 4 a.m. and sat outside. When it was 5 am, I called out my mother from the house. Immediately after she came out, not knowing what was happening, I poured petrol on her body and set her on fire.

“What started it is that I went to one Pastor for prayers and he told me that my mother is behind what is happening to me. I did not believe it at first. My mother also took me somewhere to see one woman. After my mother left, the woman also said the same thing.

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“I burnt my mother because of what I heard from the pastor and the woman, that I can only be freed from bondage when my mother is dead.”

Police sources said the case would be transferred to the Police headquarters in Akure for further investigation. (The Nation)

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Gunmen abduct Company MD, three foreigners in Lagos, demand $1.5m ransom

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File: Kidnappers
Armed men suspected to be kidnappers have abducted four Lebanese including the Managing Director of Fouani Company, a prominent representative of LG and Hisense.

According to credible sources, the victims were travelling by boat from Apapa to Victoria Island when they were ambushed near Falomo Bridge. The kidnappers, whose identities are unknown, have demanded an astounding $1.5 million ransom.

Police Public Relations Officer of the Lagos State Police, Benjamin Hundeyin, confirmed the incident and stated that an investigation is ongoing.

He said, “Yes, we received the report and are investigating it.”
“We are currently working with their families and the Lebanese community to get them released,” Hundeyin explained.

However, the abduction has sparked outrage in the business community, with many calling for increased security measures to protect citizens.

The incident raises concerns about the safety of Lagos’ waterways and the effectiveness of law enforcement agencies in combating crime.

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ICPC grills woman who accused suspended Perm Sec of S*xual harassment

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ICPC grills woman who accused suspended Perm Sec of Sexual harassment
 •Suspended Permanent Secretary of the Federal Ministry of Foreign Affairs, Ibrahim Lamuwa
Simisola Fajemirokun-Ajayi, the woman who accused the Permanent Secretary of the Federal Ministry of Foreign Affairs, Ibrahim Lamuwa, of s*xual harassment, has been grilled and thereafter released by the Independent Corrupt Practices and Other Related Offences Commission (ICPC).

This is in the wake of an ongoing investigation by the Office of the Head of Civil Service of the Federation (OHCSF), following a letter from the Minister of Foreign Affairs, Yusuf Maitama Tuggar, in response to a petition written by Fajemirokun-Ajayi, against the permanent secretary.

In an exclusive interview with Daily Trust Saturday, an official of the ICPC said that Mrs Fajemirokun-Ajayi was quizzed for hours by the crack detectives of the commission over her allegations.

The official, who did not want his name in print, said Fajemirokun-Ajayi arrived at the commission’s headquarters at about 9:40 am, on Friday, alongside her lawyer; responded to various questions posed to her.

“She wasn’t arrested. She was invited and she honoured the invitation to come and substantiate the s*xual harassment allegations against the Permanent Secretary of her ministry, Ibrahim Lamuwa,” the official said.

The official said she was released after the interrogation on Friday, adding that she would still be called upon in future to make further clarifications if there is a need for her to do so.

Ambassador Lamuwa had responded to the query issued him by the head of service, denying all the allegations labelled against him.

The ICPC’s invitation letter inviting Mrs Fajemirokun-Ajayi was addressed to the minister of foreign affairs, requesting him to release her for questioning.

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The ministry received the ICPC letter titled: ‘Investigation Activities: Notice of Invitation’ on Thursday.

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It said: “In view of the above and pursuant to sections 28 and 40 of the said Act, you are kindly requested to release and direct Mrs Simisola Fajemirokun-Ajayi of the Ministry to appear for an interview before the undersigned at the Commission’s Headquarters, Abuja, on Friday, 14 June 2024 at 10:00 hours,” read the invitation letter dated June 11, and signed by Acting Director of Operations, S. Yahaya.

It is not immediately clear whose petition led to the ICPC investigation or what exactly the agency is investigating.

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