The Minister for Works and Housing, Babatunde Fashola has urged the National Assembly to approve the $22.718 billion loan requested by President Muhammadu Buhari.
Mr Fashola who gave the charge during an interactive session with the House Committee on Aids Loans and Debts chaired by Hon. Safana Dayyabu assured that the proposed external borrowing as stipulated in the 2016 – 2018 Medium Term Borrowing Plan became necessary in the interest of the country’s economy.
According to the document presented by Debt Management Office (DMO) seen by Tribune Online, the present administration has achieved decline share of domestic service in the total public debt from over 83% in December 2015 to about 68% in June 2019.
“Nigeria had a ceiling of 25% on the total public debt stock to Gross Domestic Product Ratio (Debt/GDP) which it has operated. The ratios for December 31, 2018, and June 30, 2019, were 19.09% and 18.99% respectively.
“The debt service to revenue ratio (Debt Service/Revenue) has, however, been higher than desirable and provides strong justification for the current drive to increase non-oil revenues significantly. The debt service/revenue for the years 2018 and June 2019 was 51.28% and 54.08% respectively. The debt service figures have grown as a result of the increase in the debt stock and relatively high domestic interest rates,” DMO stated.
While addressing the lawmakers, Mr Fashola who was accompanied by the Minister for Finance and National Planning, Mrs Zainab Ahmed and Minister of State for Transport, Senator Gbemisola Saraki, explained that the proposed external borrowing was aimed at providing critical infrastructures such as roads and railway.
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He said: “As we cannot ignore the concerns about debts, so we cannot ignore the concerns and demands for the provision of life-sustaining infrastructure.
“So, everybody wants a road, everybody wants a rail project, everybody wants a port and efficient airports. They want to ensure that our ports are efficient so that business can function more effectively so that the clearing of goods can happen more quickly and cheaply.
“And we’re in the midst of these physical challenges that she (the Minister Finance, Budget and National Planning) have identified, the revenue is not just enough to meet these challenges.”
Mr Fashola said that there are a total of 524 ongoing road projects across the country but there is no money to execute them.
He said: “524 roads projects currently being executed. N73 billion released this year. We have contractors willing to do the work but we cannot pay them.
“We have had deficit budgets for a long time and so we have to borrow.
“Over 4 years, we have never received full funding for any budget. There is a deficit and we cannot finance it. We must find a away to finance these assets. We will be spending today money to secure tomorrow assets”.
While speaking on the current status of East-West road, the Minister who noted that the road was not under his purview affirmed that a substantial part of the road had been completed.
“East-west road not under my ministry. It is under Niger delta ministry. I can say here, that a substantial part of that road has been executed. I drove through the stretch in 2016. A large part of it has been completed,” he said.
On Benin-Auchi-Okene road, the minister also said: “From the briefings from the ministry of finance, there are external borrowings. There are also internal borrowings. The road is being funded under SUKUK which is local borrowing. The SUKUK is not enough to fund all the toads. We get N100 billion, we shared it across all the 6 zones.”
While responding to question on the alleged poor construction of Nigerian roads, Mr Fashola said: “Nigerian roads are designed to global standards. We are not doing things as we want but according to global standards,” Mr Fashola observed.
On her part, Minister of State for Transport, Gbemisola Sakari disclosed that part of the fund will be used to complete Kano-Lagos and Niger Delta coastal rails.
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