*“Bone-crushing loans wrecking the economy,” Atiku warns as Senate greenlights controversial request. By Our Correspondent The Senate on T...
*“Bone-crushing loans wrecking the economy,” Atiku warns as Senate greenlights controversial request.
By Our Correspondent
The Senate on Thursday approved President Bola Ahmed Tinubu’s fresh $2.2 billion loan request, a decision that has raised Nigeria’s total debt to an unprecedented N136 trillion. This approval came after the consideration and adoption of a report by the Senate Committee on Local and Foreign Debts, chaired by Senator Aliyu Wamakko (Sokoto North).
The loan request, submitted in a letter to both the Senate and the House of Representatives earlier this week, was justified by the President as necessary to address the N9.7 trillion budget deficit for the 2024 fiscal year. According to Tinubu, the funds would help finance critical sectors of the economy and ensure the successful implementation of his administration's economic reforms.
The letter was read during separate plenary sessions by Senate President Godswill Akpabio and House Speaker Tajudeen Abbas before being forwarded to the Wamakko-led committee for review. After a swift deliberation, the committee recommended approval, which was granted by the Senate through a voice vote.
This decision, however, has ignited a firestorm of criticism from opposition leaders and economic analysts who accuse the government of plunging the country further into unsustainable debt. Former Vice-President Atiku Abubakar, who contested against Tinubu in the last presidential election, was among the loudest voices against the move.
"Sinking Further into Debt"
Atiku, in a statement he personally signed, called the loans “bone-crushing” and accused the National Assembly of enabling reckless borrowing. He cited a recent World Bank report ranking Nigeria as the third most indebted country to the International Development Association (IDA) as evidence of the country’s worsening financial state.
“This report is coming at a time when the government has already signaled its intention to borrow an additional N1.7 trillion to cover the 2024 budget shortfall through Eurobonds,” Atiku said.
“What makes this particular loan proposal even more concerning is that it is benchmarked at an exchange rate of N800 to $1, whereas the current market exchange rate exceeds N1,600 to $1. This disparity raises serious questions about the economic viability of the loan and its implications for our economy,” he added.
The former vice-president also accused the government of mismanaging public funds, pointing out the contradiction between Tinubu’s boast of record-breaking revenue collection by the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service and the administration’s continued reliance on borrowing.
Budget Under Fire
Atiku’s critique was echoed by BudgIT, a budget monitoring organization, which described the 2024 budget as a “mess” riddled with inefficiencies. The group warned that the high volume of borrowing was not matched by transparent plans for infrastructure development or economic growth.
“The voracious appetite for these humongous loans appears to be powered more by corruption than by genuine development needs,” Atiku alleged.
Analysts also noted that while the government claims the loans are aimed at stabilizing the economy, the current debt burden has resulted in higher inflation, a weaker naira, and increased hardship for Nigerians.
Justifications from the Presidency
Defending the loan request, the Tinubu administration argued that the funds are essential to execute key projects and sustain ongoing reforms. The Federal Executive Council (FEC) had earlier endorsed the borrowing plan, claiming it would strengthen the country’s finances and attract foreign investment.
The Presidency further explained that the loans would be channelled into critical sectors, including infrastructure, education, and healthcare, areas the government considers pivotal to reversing the nation’s economic fortunes.
However, the lack of clear details on how the loans will be repaid has left many Nigerians sceptical. Economists warn that excessive borrowing without corresponding revenue generation risks driving the nation into a debt trap.
Public Backlash
Public sentiment has been largely negative, with many citizens questioning how much more debt the country can sustain. Social media platforms have been flooded with criticisms of both the Tinubu administration and the National Assembly, with hashtags like #StopTheDebt and #AccountabilityNow trending.
“The Senate is supposed to be the watchdog of the people, not a rubber stamp for the executive,” said a political analyst on Twitter.
Atiku, reflecting on Nigeria’s history with debt, expressed frustration that the gains made during former President Olusegun Obasanjo’s administration, which saw the country exit its debt burden, are being eroded.
“It is agonizing to see that just a few years after achieving debt relief, we are now back at the top of the global debt ladder,” Atiku lamented.
A Call for Accountability
As the dust settles on the Senate’s approval, calls for greater transparency and accountability in the government’s borrowing practices are growing louder. Critics warn that unless stricter controls are put in place, the country risks being overwhelmed by a debt crisis that could cripple its economy for decades to come.
The question on the lips of many Nigerians remains: When will this borrowing spree end, and at what cost to the nation’s future?
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