Nigeria risks losing foreign assets to reckless borrowing, CSOs warn

*Blames national assembly for country’s rising debt woes

*Plans orientation exercise for 10th National Assembly

Civil Society Organizations, (CSOs) have raised concern over Nigeria’s rising debt profile describing it a ‘debt trap’ already worsening the country’s crisis ridden economy and costing the nation its foreign assets.

The CSOs consisting the Civil Society Legislative Advocacy Center, (CISLAC) and Christian Aid in partnership with Transparency International, TI), noted that Nigeria is presently in a debt crisis with a fiscal deficit well above the statutory threshold of 3 percent , an increasingly unsustainable debt profile and a rising debt servicing that has been worsened by rising interest rates among others.

Speaking at a media briefing yesterday in Abuja, Executive Director, CISLAC, Auwal Musa-Rafsanjani, lamented that the National Assembly has failed in its constitutional duty of checkmating the excesses of the executive arm of government and is therefore largely to blame for the current debt crisis the nation is facing.

He said due to the ‘rubber stamp’ attitude of the legislators who sign or approve loans that the executive has been taking in the last few years without fully grasping its implication to the economy and generations yet to come, Nigeria is now in a debt trap as the government keeps taking loans from private creditors hence deepening the debt crisis and increasing human cost.

Auwal pointed that “barely two decades after the buyback deal by the then President Olusegun Obasanjo, from the Paris Club debt relief agreement, Nigeria is already in another debt crisis with an inevitable human cost.

“With limited access to further financing on concessional terms and with a growing presence and influence of private creditors in its debt profile, Nigeria’s national debt is growing and increasingly putting the country in a precarious position.

He said “part of the crisis we have is that when the new or incoming legislators come, they hardly get any orientation and that what CISLAC and Christian Aid will be working on. We will organise orientation on our debt situation, our economic situation to all the relevant committees when they form those committees.

“We have launched a research product that centers on revealing and challenging the role of private creditors in hindering people’s recoveries to enhancing the urgency with which the international community must address sovereign debt crisis.”

Senior Programme Coordinator, Christian Aid, Uzor Uzoma, explained further that most of government’s borrowings are done without recourse to the law and sadly, the lawmakers donor read through properly to ensure that the Constitutional provisions with regards to borrowings are adhered to. She advised Nigerians to get their Permanent Voter Cards (PVCs) and elect worthy leaders in the coming general elections.

“We make policies and then we go against the same policies that we make and our government signs these documents without looking at the content s. We relate the debt against the Gross Domestic Product, (GDP) and that is not proper because the truth is that things are not done this way. As it is now, I am hearing that President Buhari is still asking for another loan now even he is about to leave office,” she said.

Programme Manager, Tax Justice, Mr. Chinedu Bassey adds that “The laws are very explicit. Sections 34 to 36 of the Fiscal Responsibility Act 2007 specify what these loans should be used for and the threshold with regards to concessional loans.
“But a new development in the 2019 finance Act, a section of that law was amended and infused a very ambiguous clause against the earlier statement that the loan should not be used for anything other than capital projects that have the propensity to pay back the loan. Now it has been infused that the president has the right to borrow for any other reason.”

Nigeria’s net foreign asset has dropped from N7.1 trillion to N4.8 trillion in July 2022, the largest month on month drop since 2019 and this is seen to be as a result of increase in foreign liabilities such increased borrowing from the debt market or from direct lending facilities, according to media reports.