“EVEN billionaires worldwide borrow. Since we are credit worthy, why can’t we borrow?”
That was the position of the Federal Government on Wednesday on the criticism trailing its debt profile.
Minister of State, Finance, Dr Yerima Lawan Ngama, who spoke after the Federal Executive Council (FEC) meeting in Abuja, said the Federal Government would continue to borrow because “we have what it takes to service the debts”.
With Ngama at the briefing were Minister of Information, Labaran Maku and his counterpart in Water Resources, Sarah Ochekpe.
He said: “Nigeria, being a big country, has too many worthy projects to borrow for and since the wherewithal is available, the Federal Government can take advantage of any loan facility to carry them out. If you check the list of highest debtors, you will see the world’s richest people there. Yes, we are rich but that is the same reason we borrow. If we are not credit worthy, no one will lend money to us. Even elementary economics say that human want is insatiable and the richer you are, the more you want to acquire. We can’t say because we are rich and if we have a big project, we should not borrow to execute it. People who don’t borrow are people who cannot afford to do so.”
He revealed that the Council adopted a debt management plan, dubbed 2013 Medium Term Debt Management Strategy “to enable the private sector access loan facilities that will facilitate their financing of projects they envisage to carry out”.
Ngama, however, said that with over N6 trillion worth of debt and a high interest rate, debt servicing was becoming difficult.
To him, Nigeria’s huge debt profile was caused by wage increase, global meltdown, obligation to local contractors, pension of workers of some government agencies, such as the Nigerian Telecommunications (NITEL) and Nigeria Airways.
