President Bola Tinubu’s administration, upon taking office, pledged to reduce public spending funded by borrowing. However, he has recently requested the National Assembly approve fresh external loans totaling $7.8 billion and €100 million as part of the 2022-2024 borrowing plan. Tinubu emphasized that this borrowing is vital to bridge financial gaps and normalize economic activities, focusing the funds on infrastructure and other critical sectors.
According to a report by This Day Live, Nigerians have expressed concern over this move, as the nation risks falling into a debt trap. Especially since Tinubu had announced savings of approximately N1 trillion from the elimination of fuel subsidies, expectations were high that these savings would negate the need for new debt. The president’s recent loan request, against the backdrop of a national public debt of N87.38 trillion, raises the public debt even further.
Criticism also arises from the supplementary budget of N2.17 trillion passed by the National Assembly, reflecting a continuity of the previous government’s debt-driven policies. Expenditures such as N7.20 billion for the presidential residence and office renovations, N1.96 billion for vehicles for the Presidency, and N59 million for the State House Lagos Complex appear incongruent with the government’s plea for fiscal tightening among citizens.
In contrast to importing vehicles, a suggestion has been made to emulate Lagos State’s approach, where Governor Babajide Sanwo-Olu initiated a joint venture with CIG Motors to assemble vehicles locally. This strategy could save foreign exchange and bolster local industry, a move President Tinubu has not yet adopted.
The Tinubu administration needs to disclose the exact savings made from the removal of fuel subsidies, enhance domestic revenue generation, reduce leakages, and maximize tax efficiency. Additionally, tackling crude oil theft is imperative. The government must also encourage the exploration of natural resources in each of the 36 states to stimulate GDP and prevent a looming debt crisis.
