Adeosun, Peter Obi Spar On FG’s Borrowing Spree
Nigeria’s Finance Minister, Kemi Adeosun and former governor of Anambra State, Mr. Obi Obi on Monday slugged it out on whether it is right for the Federal Government to continue to borrow at the rate it is doing.
According to Obi who lamented the massive borrowings ongoing at both state and federal government levels, it was important that the government curtail its borrowings and instead hash out plans to save more money.
But Adeosun said government had been left with no choice than to borrow after the past administration frittered away Nigeria’s savings and without building any infrastructure to sustain economic growth.
The two spoke on Monday at the 2017 edition of The Platform, a programme organized by Covenant Christian Centre in Lagos.
“Minister, when they come telling you they want to borrow money to build super highway, tell them we don’t need super highway. Tell them we just need normal road. In the meantime, we’ll do with it. I am worried about the level of borrowing,” he told the Finance Minister.
“The reason we are talking about massive borrowing is because we didn’t save yesterday and the high cost of governance.
“Our politics and lifestyle have been built on an epicurean life of ‘Let’s take care of today for tomorrow will take care of itself.’
“That is why section 162 of our constitution said that we shall maintain a federation account through which money will be paid into and shared among the three tiers of government – state, federal and local government, without any remaining.
“Even in motor parks, they keep some change for tomorrow. But everything here is shared. No nation can survive without saving for tomorrow. And that is the crisis we face today,” said the former governor who is reputed for clamouring for thriftiness in governance.
But in response, the finance minister, blamed corruption and inability of previous governments to save money and build infrastructure on the reason for the borrowing.
Adeosun said borrowing had become inevitable if the Nigerian economy must get out of recession.
“In 2014, the federal government only spent 19 billion naira on road. I was a commissioner in Ogun state and in one year, we spent 24 billion naira on roads. How can a whole federal government spend only 19 billion naira and we expect to grow?
“A lot of money has been wasted. What else happened to that extra money we earned from oil? A lot of it was stolen.
“When the CBN governor at the time said that money was going missing, he was harassed. When a banker who is supposed to collect your money tells you that your credit is not entering your bank account, you should take notice but we didn’t because things looked okay. Money was going missing because people were selling oil and diverting the proceeds.
“And we are all to blame for doing nothing when we learnt that money was being stolen. And now we are running after money everywhere,” the Minister said.
According to her, “there are countries that sell their oil on forwards, like the Mexicans. They sell their oil forward. They say, give us $68 per barrel, we don’t care if oil goes up to $150, we just want stability.
“And there are some countries that spend only a fixed percentage of their oil revenues. But we lived on oil and it made us feel good.
“Unfortunately, we did not spend the monies from those boom years on the right things. That is why we are now in a position where we do have to borrow.
“And why are we borrowing? Because, if we wait for the oil price to recover, we would be in recession for a very long time. The only option we have is to borrow but use the money for capital projects that will grow the economy.”