Stacks of U.S. 100 dollar notes are pictured at the headquarters of the Korea Exchange Bank in Seoul August 2, 2011. A last-gasp deal to raise the U.S. borrowing limit cleared its biggest hurdle in Congress on Monday, warding off the risk of a debt default after weeks of partisan feuding that damaged the image of the U.S. abroad. REUTERS/Jo Yong-Hak (SOUTH KOREA – Tags: BUSINESS)
Nigerians cry out that the N850 billion loan approved by the International Monetary Fund (IMF) for the country to fight Covid-19 will be largely embezzled by people in power.
The IMF yesterday approved Nigeria’s $3.4 billion (N850b) emergency loan request to help the country fight the impact of the coronavirus (COVID-19) pandemic.
The loan seems the last straw a drowning Nigeria may clutch onto as very low prices has weakened Nigeria’s pseudo-mono economy that essentially depends on oil revenue. More than half of government revenues and 90 per cent of exports is oil-centered.
The 2020 budget needs a major boost – hence President Muhammadu Buhari (PMB) ask the Senate: “To ensure that there are adequate funds to finance critical projects and programmes in the 2020 budget, I hereby seek the Senate’s approval by resolution to raise the N850 billion of new external borrowing in Naira from the domestic capital market instead of from the international capital market.”
Nigeria had tried unsuccessfully to get the loan from the international capital market. Loan from the international capital market would have been more beneficial.
PMB reminded the Senate of the provisions in the 2020 national budget, which empowered government to raise the loan to fund the capital budget.
He said: “The Senate may wish to recall that the 2020 Appropriation Act provided for N1,594,986,700,544 of new domestic borrowing and N850 billion of new external borrowing. These borrowings were to part finance the 2020 budget deficit of 2,175,197,885,232 only.”
Meanwhile, the general reactions of Nigerians to the news is negative, with many lamenting the loan should not have been sought and prayed it was never approved.
Meanwhile, a vocal and prominent Nigerian lawyer based in South Africa, Barrister Austin Okeke said: “It has been confirmed to me this morning that the newly approved loan of 850 billion Naira is actually not a new loan, as it’s already approved in the budget but was to be borrowed externally.”
He corroborated further that: “The President, realizing that foreign borrowing is not now possible, he asked for the Senate to approve for him to borrow the amount internally from the Nigerian Stock market. So no point fighting against it as it’s not a new loan.”
Okeke’s angle to the story is to calm the tensed nerves of those who raise bitter eyebrows about the loan.