Financial analysts and economists have challenged the Federal Government to use funds seized from corrupt politicians to fix infrastructure projects across Nigeria.
They argued that this would be more cost effective than borrowing 750 million pounds sterling from the United Kingdom’s Department for International Trade for the same purpose.
Contrary to the assurance given by the department to support infrastructure projects in African countries, including Nigeria, with lending and guarantees, the experts described such a gesture as a way of mortgaging the future of the country.
The Managing Partner, Esho & Adebayo Consult, Dr. Peter Adebayo, warned that the increasing debt portfolio of Nigeria could undermine the nation’s development, as it did before the 2004 debt relief.
He disagreed with the option of taking loans for development since there was the alternative of private sector funding of infrastructure development and of seized funds that ran into billions of naira.
He said, “The government told us that the money from Sukuk bond would be tied to certain projects, but what is happening now? If the yields are not properly utilised, the projects are rolled over and the debts become a burden. If the government is sincere, we will make progress as a country. No country can survive when it borrows to consume.
“Our children have a huge debt overhang; they are likely to spend their lives paying debts of their parents. Some of our leaders are myopic; they do not think about the effect of these debts on the coming generations.”
Speaking in the same vein, a Fellow of the Chartered Institute of Bankers, Dr. Alaba Olusemore, said, “High debt profile is undermining the development of Nigeria. You end up paying much more than you borrowed on interest alone. The money that should have been deployed to developmental projects will now be used to pay just interest.
“If you are already neck deep in debt, the sensible thing to do is to stop borrowing and see how you can redress the requirement you have budgeted for. We need to cut down on our expenses – take away the frivolities or reduce the amount we need to spend.”
Meanwhile, the DIT said that it could enable the provision of the facilities through the UK Export Finance, the country’s export credit agency.
It said loans could be extended in the local currencies of nine African countries for projects ranging from transportation, mining and general construction, but such projects must include, at least, 20 per cent UK content and meet all other lending criteria.
The UK Trade Commissioner for Africa, Mr. Emma Wade-Smith, however, said, “For example, the UKEF has the ability to support infrastructure projects in South Africa (up to £4bn), Kenya (up to £1bn) and Nigeria (up to £750m).
“Africa’s infrastructure challenges not only inhibit its ability to trade with the rest of the world, but are also a significant obstacle
to intra-African trade, both of which are critical to the continent’s economic growth agenda.”
He described finance as a critical component of infrastructure development, adding, “The combined risk appetite of £21.4bn we have across the region to facilitate projects is a clear sign of the UK’s belief in Africa’s long-term economic growth trajectory.”
