Reject Reckless Issues, Citizens Tell Nigeria

Reject Reckless Issues, Citizens Tell Nigeria

CITIZENS and civil society groups in the Niger Delta, Nigeria's main oil and gas region, want the country to reject fresh request from President Goodluck Jonathan for approval of a new $4.427billion foreign loan. Approval of such a loan would be tantamount to encouraging financial recklessness, corruption and a return to unsustainable debt burden, Social Action said.

AkanimoReports sources say President Goodluck Jonathan requested for new external loans to ‘finance critical infrastructure in the country’. Instead of approving a new loan, Social Action, a civil society group, is calling on the National Assembly to demand that governments at all levels demonstrate how existing petroleum revenues and allocations from the Federation Account have failed to improve public infrastructure, despite implementation of annual budgets.

In the week before the Presidency announced its new loan quest, the Debt Management Office (DMO) had reported that ‘the interest payments/domestic budget revenue ratio in the year 2010... is higher than the upper boundary of the threshold’. In simple terms, Nigeria’s debt is unsustainable.

In a 2009 report by Social Action, it was shown that actual external borrowing by Nigeria prior to 2005 was about $10 billion. However, through interest payments, including penalties, Nigeria had paid back $35 billion and, as at 2005, still owed $36 billion. After the celebrated exit from the Paris Club of Creditors with a bulk payment of $18 billion, Nigeria returned again to external borrowing almost immediately. Currently, the external debt profile stands at close to $5billion, and by all indications, seems to be growing.

“We are worried that loans are emerging as an instrument for fuelling corruption, and provides added sources of funds for ready looting. In over 50 years of borrowing, there is hardly any significant improvement in health, education and infrastructure, sectors for which most of these loans were supposedly collected”, said Asume Osuoka, director of Social Action. “The quest by the Presidency to plunge the nation into further debt at this critical time, gives the impression that the money is being sought to purchase the 2011 elections for the ruling party”, he said.

2008 and 2009 budget monitoring reports of four states in the Niger Delta produced by Niger Delta Citizens and Budget Platform revealed that majority of the projects mentioned in annual budgets are never carried out while local government authorities do not even bother with producing annual budgets.

Social Action states once again that the reckless borrowing by federal and state governments mortgages the fortunes of present and future generations.

Social Action restates its call on the National Assembly to place a moratorium on all external borrowing and to institute a public audit of all previous external loans to reveal the conditions on which they were taken and what was done with the funds

ENDS

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