Ex-CBN chief backs FG’s plan to borrow $29.9 bn
Loan
Dr Titus Okunronmu, a former Central Bank of Nigeria (CBN) Director, on Monday commended the Federal Government for its plan to borrow $29.9 billion to finance infrastructure development in the country.
Okunronmu, an ex-staff of the CBN’s Budgetary Department, told the News Agency of Nigeria (NAN) in Ota, Ogun, that borrowing to revamp infrastructural deficit was a welcome idea.
NAN reports that President Muhammad Buhari had on Oct. 25 written to the National Assembly seeking approval to borrow $29.9 billion to finance the nation’s infrastructure development from 2016 to 2019.
President Buhari’s letter said it had become necessary to resort to prudent external borrowing to bridge the financial gap.
He added that the monies would be applied to key infrastructure projects including power, railway and road project amongst others.
Okunronmu said: “If the Federal Government borrows for development, it is good and realistic, but borrowing for consumption is counter-productive to the economy’’.
He said that borrowing for investment, not for consumption, would have positive impact on the economy and boost economic growth.
The ex-CBN director said that the expected revenue in 2016 budget was not enough to cover the recurrent expenditure, so the government had to resort to depending on domestic and external borrowing.
He urged the federal government not to borrow from the nation’s banking sector because borrowing from local banks would put more money in circulation, causing inflation.
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2 Comments
Again where your expenses are greater than your income wahala dey oh. We cannot manage the funds the cbn has placed with the banking sector for loans for agriculture and manufacturing and sme’so and we want to manage a 30 billion dollar loan? It’s not that the amount is so huge, in a normal environment, but here?? We have not reduced our recurrent expenditure, we have not introduced practical guidelines for transparency and accountability and we are borrowing in these volumes? It’s not us that I feel sorry for anymore, it’s the future generations coming up after. And, if our expenditure is higher than our income, pray tell how do we repay? I na no book oh, but something seems wrong with this picture.
It would be good bold move if Buhari would be in office to manage the money because without the necessary infrastructure, Nigeria will never develop. Again, since Nigeria is such an unstable country where people change government policies without thinking, this may mean taking loan to make politicians rich. This has been the situation for ages. Who would have believed that money and loans made for the purchase of military equipment to fight Boko Haram would be shared in the way Dasuki and Jonathan did? Who would believe that Nigerian soldiers would be sent to war so that they would be killed?
We will review and take appropriate action.