By Joni Akpederi
Nigeria’s intention to go on another debt binge in a $5billion total return swap deal with United Arab Emirates’ First Abu Dhabi Bank has been flayed by none other than the International Monetary Fund.
Sundry economy- watchers are worried that the borrowing will further mire the country, already in the hole for $111billion, in odious debt. Critics say it is bad enough that Nigeria currently devotes almost a quarter of year’s N68.3 trillion budget to debt servicing, refusing to buy the Administration’s excuse of needing the new loan for debt repayments and infrastructure building.
While the Fund, on its part is not against more credit lines for the country, it kicks against the complexity and opacity of such of such a deal, given Nigerian institutions’ past records, penchant and notoriety for opaque operations. The lingering case of the Nigerian National Petroleum Corporation, NNPC, readily comes to mind. The Fund advises Government to consider Eurobonds and other concessional facilities for the huge resource gaps in its national budgets.
Back in 2005 under the Olusegun Obasanjo Administration, Nigeria cleared its total of $30 billion external debt. The country secured a mammoth $18 billion cancellation by the Paris Club of official creditors by agreeing to a bulk sum of over $12 billion to get itself off the debilitating debt burden.
Today, under the Tinubu-led APC, external debt has ballooned to $51.9 billion, about 47% total debt and over 40% higher than what the Obasanjo’s PDP government chafed at and got rid of.
Worse, the Tinubu Administration citing infrastructure development and debt repayment imperatives is on the verge of piling another $5billion odious burden.
Economy watchers are worried that the country’s economy, hampered by near-intractable as well as resource mobilisation problems, cannot repeat the Obasanjo deft move for obvious reasons of lack of political will and openness and transparency.