The Peoples Democratic Party has alleged that the proposed N1.84tn borrowing for the N6.08tn budget presented to the National Assembly by President Muhammadu Buhari has made the nation a borrowing country.
It said that with this, the country was going the way of Greece.
The National Publicity Secretary of the main opposition party, Chief Olisa Metuh, said this in an interview with journalists in Abuja on Tuesday.
He explained that a breakdown of the N1.84tn showed that Nigeria would be borrowing N5bn a day for the next 365 days, starting from January 1, 2016, without corresponding provision for economic production and a clear repayment plan, a scenario he said spelled doom for the nation.
Metuh said, “Some people may be wondering why we raised an alarm about the budget. The reason is simple.
“When we analysed the budget, we discovered it is a misshapen attempt at a Keynesian economics of applying deficit spending to stimulate growth even when studies have proven that GDP growth rates decrease by over 50 per cent when debt goes from low or moderate to high. But then we know the borrowing here is to pay huge campaign debt and fund a political war chest.
“By every standard, this budget is a booby trap against the nation. When you break down the proposed N1.84tn borrowing, you discover that it amounts to borrowing N5bn everyday for the 365 days in 2016. The questions are: for what specific projects are they borrowing N5bn per day and how do they intend to pay back?
“The President should explain to Nigerians how they intend to pay back the loan. Is it by continuous borrowing to service the interests? And does he intend to accumulate a colossal debt for future generations of Nigerians?
“The truth is that this administration cannot justify this proposal. There is no known economy in the world where you can justify borrowing N1.84tn without specific projects and precise repayment outline.
“This is worse still in an oil-driven, mono-economy at a time crude oil is selling for $30 per barrel and is speculated to go down to about $20 or even lower in the next one year. The idea can only come when you diversify the economy and boost production capacity in manufacturing and other critical sectors, a direction, which the budget clearly failed to provide.”
Metuh added that from all indicators, the borrowing would be negative, alleging that the President was driving the country towards the path of Greece.
He said, “They are driving us to be like Greece, and to plunge us into an unnecessary debt. When the PDP took office in 1999, we achieved the cancellation of inherited debts.
“This administration, in seeking to accumulate debts, should know that there is no possibility that any country in the world will give us debt cancellation anymore.”
Metuh said he and members of his party were worried about what he described as the negative economic policies of the present administration and the copying of strategies that he said failed in other economies.
He said, “Recall that we had earlier alerted on the negative consequences of the retrogressive foreign exchange controls wherein this government is making it impossible for honest Nigerians to engage in free trade and regulate their personal activities.
“There seems to be the erroneous belief that the controls will create foreign exchange stability or strengthen the naira by limiting foreign currency outflows.
“This policy had badly affected other countries in the recent past; including Argentina, whose new government had to reverse the policy to save the country’s economy. Why then are we copying a policy that failed in other countries?”
Metuh added that in practice, the kind of control the Federal Government was implementing had been proven ineffective in preventing capital flight.
He challenged the Federal Government to a public debate on the budget.
But the Presidency has said the money that will be borrowed in the 2016 Budget is for capital projects.
The Senior Special Assistant to the President on Media and Publicity, Mallam Garba Shehu, made the clarification in an interview with one of our correspondents.
Shehu was reacting to a statement credited to the PDP that the proposed N1.84tn borrowing from the N6.08tn Budget as presented by Buhari had made Nigeria a borrowing nation.
Shehu said the borrowings would not be spent on any recurrent expenditure.
He added that the Budget Office was working on the figures and it would be made known to the public once job was concluded on the document.
“The borrowings are for capital projects, they are not for recurrent expenditures like feeding, salaries among others,” the presidential spokesperson said. (Punch)